Live action filmmaking mixes with imaginative animation in director Michael Landon, Jr.'s feature adaptation of author Margery Williams' beloved children's book. An energetic child with a vivid imagination, Toby Morgan (Matthew Harbour) lives with his father (Kevin Jubinville), a successful businessman who seemed to shut down emotionally following the death of Toby's mother. When Toby is sent to spend the Christmas holidays with his loving but stern grandmother (Una Kay), he wanders through the lonely house until eventually discovering the "magic attic" that was once his father's childhood playroom. There, Toby is surprised to discover that his mother left him a stuffed velveteen rabbit - her final gift to her beloved son. Hugging the rabbit close as he starts to cry, the grieving boy watches in wonder as his tears magically bring the toy to life. Before long, Toby is frolicking in the enchanted attic with a whole new group of friends, including the impetuous Horse (voiced by Tom Skerritt), and the wise but skittish Swan (voice of Ellen Burstyn). Toby's one wish is to spend Christmas with his father, and Rabbit's one wish is to someday hop across the fields as a real rabbit. Later, when Toby falls seriously ill, the courageous Rabbit helps him to win over his grandmother and make a full recovery. When Toby's father returns in time for Christmas, the power of the young child's love grants the Velveteen Rabbit its one true wish.

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