It is London, and its citizens are celebrating most festively ("Christmas in London"). As they disperse, a 31-year-old Charles Dickens is discovered in the sitting room of Furnival's Inn scribbling furiously. Mrs. Furnival enters calling for Mr. Dickens. The young author, however, is too engrossed in his work to notice. He finally sees that she has arrived and happily announces to her that he just completed the next chapter of his latest novel, Oliver Twist. The manuscripts are already late and need to get to the publisher. He asks her to take them there. Mrs. Furnival is concerned that Charles has written for days without taking a break. She tries to convince him to go for a stroll through the city and take in the Christmas season; however, Charles doesn't appear to be the least bit interested in this holiday ("I Have No Time for Christmas").

They both leave the inn and go off in different directions. Out on the snowy London street, two peddlers are selling their wares ("Peddlers on Parade"). The two men notice Charles, the famous author. Finally, a boy emerges carrying a sign that reads "A Christmas Story by Charles Dickens." Charles sees this sign and stops dead in his tracks. He panics even more when he hears the boy cry out, "At the booksellers this Friday!"

Chapman, Dickens' publisher, enters and walks over to the young author with a very determined stride. He chastises Charles for being overdue with his revisions and further reminds him about the Christmas story. Dickens tells Chapman that the Oliver Twist revisions are on their way to his office (which is true), and that the Christmas story is waiting at home to be recopied (which is a lie). Chapman suspects that Dickens is lying, but Charles assures him that he will meet the deadline. Chapman then further warns the young author that he had better have that story on time... and that it better be brilliant! Dickens darts away as soon as Chapman isn't looking.

As Dickens leaves, he runs into a Young Woman who is taking care of a group of orphan children. She asks him for a donation, and he gladly obliges. However, when she presses him to pay a Christmas visit to the Orphan House down the street and see how the children suffer, he explodes. He's not angry at the woman and the orphans, rather at the fact that he must meet a deadline and write a Christmas story that he hasn't even started. Hearing the woman mention "Christmas" only reminds him of this. Charles exits.

Charles's father, John Dickens, enters and goes to a tailor, who measures him for a coat. He has come to town to see his famous son and get a new, expensive suit at the same time. Upon being presented with a bill, he promptly tells the tailor that Charles will pay it ("My Son, Charles").

The tailor scurries through the streets, locates Charles and gives him the bill. Meanwhile, in another part of London, John enters a barbershop and is groomed immaculately (also having this bill sent to Charles), finally dining at a wonderful cafe, where he informs all of the patrons that the dinner will be paid for by his famous son.

Back at Furnival's Inn, Charles returns from his walk, not only disturbed about writing a new Christmas story, but also angry at his father and all of the unpaid bills that have been thrown his way. Mrs. Furnival informs Charles that his father is indeed waiting for him in his room.

Charles goes to his room, only to find his father asleep at Charles's writing desk. In his father's ear, Charles pretends to be a waiter asking if everything is to his liking. The half-asleep man tells him that everything is fine and that the bill should be sent to his son, Charles. With that, John wakes up, only to find his son staring at him. He tries to cover, saying that he was just having a dream. John tells Charles that he has come to celebrate Christmas with his son; however, Charles tells his father that he must work, as always. It seems that Charles does all of the work while John gets all of the pleasure. In fact, it's been that way since Charles was a boy. He tells his father that he is sick and tired of it! John gets offended and goes to a room at the inn.

Left alone, Charles tries to write the Christmas story, coming up with a variety of scenarios. Nothing seems to work. He tries to calm down and simply write ("Writing Sequence I – Beautiful Flowers"). Here, he creates a story (enacted on stage) about a boy named Tim on Christmas Eve, who has just left the factory where he works. He has his Christmas bonus and is wondering what he should buy for his mother and father. It's only a penny, and it becomes all too apparent that he can afford nothing. Strangely enough, a Flower Girl gives him all of her flowers – for free! She does this because his story is much too sad for her to hear. Tim tries to give her the penny, but she doesn't want it. A gift is free. He gives her a kiss, takes the flowers and runs through the streets with his treasure.

He arrives at debtors' prison to give his parents their present; unfortunately, the guard tells him that no visitors are allowed that late at night. The guard finally lets him in – only because it's Christmas. Tim finds his parents, who have been jailed for their financial failings, and reveals the flowers. Instead of being happy with the gift, they chastise the boy for spending his money foolishly. Even after learning that the flowers were a gift to him, they still are angry. Why couldn't he have sold the flowers and raised money to help erase their debts? The poor boy is terribly hurt by all of this, but his parents don't care. They (especially his mother) are more concerned that their son continues working to help them get out of prison. Out in the streets, Tim collapses and prays to God, asking Him for help. He doesn't want to go to the factory! He wants to go to school and make something of himself.

Charles crumples the paper and angrily comments that he could never use that story for Christmas. In actuality, that happened to him, and it is far too depressing for the holiday season. An idea dawns on Charles: He'll make Tim a little older and invent a wonderful, happy place for him ("Writing Sequence II – Flattered").

The scene transforms itself to a beautiful dance, where couples enter in masks and gowns. One couple, Tim and Rachael, dance away from the others. Tim asks Rachael if she read the poem that he sent her. Of course she did, and she was very "flattered." He explodes! "Flattered" is not the word that he wants to hear! He loves her madly and wants his love returned! Rachel cannot say "love." Before she can tell him why, they are swept away to participate in a dance where the entire goal is to be left with a partner when the music stops ("The Partner Dance"). Throughout the dance, Tim desperately tries to get to Rachael; however, she keeps avoiding him. The dance finally finishes, and Tim follows Rachael to the next room, where the young woman desperately tries to get him to change the subject. He presses her to tell him just why she won't love him. She finally admits that he is just a boy who doesn't have any "prospects." She needs more than that.

Charles finds this all too painful, for that, too, actually happened to him. Maria said those very words to him. He can't make this painful memory into a Christmas story! Charles drops his head into his hands in despair. The Young Woman playing Rachael approaches Charles and asks him if he was indeed hurt badly by Maria. Charles panics when this "ghost" that he has created actually talks. Having heard all of the commotion, Mrs. Furnival enters the room wondering if everything is alright. He asks Mrs. Furnival if she sees anything strange in the room. She only responds that she does indeed notice the mess of papers all over the floor – but not the ghost. Charles is terribly confused, and Mrs. Furnival notices just how out of sorts he is. As she leaves, she begs him to get some rest. Charles tries to rid himself of the ghost; unfortunately, she won't leave. She begs him to take her advice: Let his past in. His novels are full of unhappy childhood memories. Whether he knows it or not, these can be a part of his Christmas story. He begs her to go, and she finally does.

Returning to his writing, Charles decides to try – perhaps – to use some of the poverty and pain... and then bring in a Christmas miracle. He picks up his scraps of paper and decides to write about little Tim, giving him an equally pathetic family ("Writing Sequence III – The Happiest Family in London").

Here, we find the Trotwood Family, a family that has nothing. Mother sits home and sews while Father has just been let go from his job. Although life is terrible for them, at least they have their son, Tim, to brighten their day.

Tim is off at the fancy Christmas Ball with Rachael Pembroke. In fact, they think that he might be asking her to marry him. Tim returns and is terribly depressed. Rachael turned down his proposal, saying that he has no prospects. She even called him "worthless." Things really seem bleak for this family; however, a knock at the door suddenly brings them good fortune. Mr. Alfred Hargreaves, a lawyer, has come to announce that Father's long-lost father has just died and has left his fortune to him. The Trotwood Family is finally rich! Rachael appears and excitedly announces that she would love to marry Tim after all. This Christmas, the Trotwoods are indeed the happiest family in London.

Charles seems happy with this story and decides that people will simply love it. The Young Woman (ghost) feels otherwise and confronts Charles, telling him that the story is "rubbish." This makes it look like money is the answer to everything. Charles ignores her, stacks up his papers and reads over what he has just written ("Writing Sequence III – Speed Read Reprise"). Charles then proclaims that it is indeed "rubbish," tears up the story and collapses to the floor.

Once again, he talks to the ghost and tells her that he can't write a Christmas story – he just doesn't know how. Charles has never gotten a Christmas gift. He's had to work for everything. The ghost calms him down and tells him simply to use the memories of his past to create a story that will be honest and true ("Writing Sequence III – Muse's Incantation").

Charles does as she asks and, pretty soon, the characters who have played Tim and the Father in previous attempts now play John and Charles Dickens from twenty years earlier. It seems that Young Charles has gotten into an argument with his factory employer and was fired. He, in fact, was happy that he was fired since he didn't want to spend the rest of his life working there. His father agrees with his son. Charles's Mother, on the other hand, has spoken to Mr. Guildfeather, Charles's employer, and is happy to announce that he has agreed to give Charles his old job back. Charles refuses to go back there, but his Mother makes him feel very guilty by telling him that he is the only hope that they have right now. God only knows when John will get another job, and, without Charles working in the factory, they may have to go back to debtors' prison. Charles finally agrees, and it all seems to be decided until John steps forward and argues with his wife. Charles will not go back to work at the factory! His son should go to school. In fact, he'll do anything so that this may be possible. Even though his wife argues, John has made up his mind ("My Son, Charles – Reprise").

Thinking back on this memory, Charles realizes just how much his father did for him. Because of what John did, Charles is the writer that he is today. Charles realizes that he has never thanked his father for all of this. He has been too angry about everything else to remember a sacrifice made many years ago. Talking once again with the Young Woman (ghost), Charles realizes that he has been wrong about Christmas all along. With his new outlook, he's ready to write that Christmas story ("No Time for Christmas – Reprise").

The new Charles is bursting with happiness and tells Mrs. Furnival to prepare a Christmas party that evening – he'll pay for it all. Invite everyone: his father, his publisher, the orphans and anyone else that she wants. Christmas is a time to celebrate! Mrs. Furnival is pleased to see Charles so happy. She begins the preparations.

The new Charles tells his father that he loves him and agrees to pay all of the bills that may come his way, for money isn't an issue. Mr. Chapman arrives to get the Christmas story, and Charles confesses that he hasn't even begun writing but doesn't care if he ever writes again! There are more important things than writing! Mr. Chapman feels that Charles has lost his senses; however, the young writer feels that he has finally come to his senses! At last, he realizes what Christmas really is!

Mrs. Furnival announces that the food has arrived and that the orphans have, too. The Mistress of the Orphan House (who resembles the ghost that helped him find his way) thanks Charles for his generosity. Charles is quite taken with her and thanks her and everyone else ("The True Meaning of Christmas"). Hearing the smallest orphan say, "God bless us every one," suddenly inspires Charles to go and begin writing. Soon, Young Charles Dickens, himself having found the true spirit of Christmas, is writing the famous story of Ebeneezer Scrooge.