A wicked king has taken over the Emerald City, and wants his daughter, Princess Gloria to marry the horrid courtier Googly-Goo, though she loves Pon, the Gardener's Boy. The camera follows two farmers placing a Scarecrow upon a pole in a cornfield. Pon rescues a Kansas girl named Dorothy from the evil witch Mombi, whom Princess Gloria has been taken to by King Krewl to freeze her heart so she will no longer love Pon. An Indian princess has a ceremony to bring the Scarecrow to life. Pon rescues the cold-hearted princess and they flee for help, discovering the Scarecrow, who promptly falls in love with the princess, and Button-Bright, a lost boy from America. They come to the castle of the Tin Emperor, Nick Chopper, and after oiling him, he falls in love with Gloria. After a bit of a chase aided by the Sawhorse and the Wizard, Mombi turns Pon into a Kangaroo, and a slough of Fred Woodward's animals battle it out.

Ojo and Unc Nunkie are out of food, so they decide to journey to the Emerald City where they will never starve. Along the way, they meet Mewel, a waif and stray (mule) who leads them to Dr. Pipt, who has been stirring the powder of life for nine years. Ojo adds plenty of brains to Margolotte's Patchwork servant before she is brought to life with the powder. When Scraps does come to life, she accidentally knocks the liquid of petrifaction upon Unc Nunkie, Margolotte, and Danx (daughter Jesseva's boyfriend). So all go on separate journeys to find the ingredients to the antidote.

The fairies of Oz gather in the forest of Burzee one evening and weave a magic cloak that gives the wearer one wish, so long as it has not been stolen.