It's story time in the forest, and all the young Saplings – along with Stump, a grumpy old tree stump – have gathered to hear Otto the oak tell his latest tale. Today, Otto's story begins in Frog Creek, Pennsylvania, where a brother and sister named Jack and Annie find a mysterious tree house and discover that it is filled with a magnificent collection of books ("How Far Can You See?") As Jack is looking at a picture in a book about dinosaurs, he idly wishes they could go there – and, magically, the wind begins to blow and the tree house begins to spin ("Taking the Tree House for a Spin"). Terrified, Jack and Annie cover their heads and cling to each other.

The spinning stops. Jack and Annie look out the tree house window to discover that they have arrived in a land that looks exactly like the picture Jack was looking at in the dinosaur book. Annie spots Henry, a Pteranodon. Before Jack can stop her, Annie scrambles down the tree house rope ladder to meet the strange creature. Jack warns her about the dangers of making friends too hastily ("Friend or Foe"). Terri, Larry and Gary, three Triceratopses, enter the clearing. As curious about the two strange human creatures as Jack and Annie are about them, the Triceratopses join in the song, with everyone finally agreeing that they can be friends.

As Jack is making notes about his experience, he spots a gold medallion with the letter "M" on the ground. Before he can consider the mystery of how the medallion came to be in dinosaur times, Annie calls out that she's found something wonderful – a nest full of dinosaur eggs! Annie takes a flower from the nest and suddenly, with a huge roar, Natty the Anatosaurus rushes in to protect her nest! Annie freezes as Natty is joined by two more Anatosauruses, Susan and Joan. While Jack tries to figure out what to do, the three Anatosaurus mothers commiserate about the challenges of dinosaur motherhood ("A Mother's Work Is Never Done"). During the song, Annie slowly crawls back to Jack and they watch from a safe distance... until Annie decides to make friends with Natty. To Jack's surprise, Natty is receptive to Annie's friendly approach, and Jack and Annie are amazed that they are having an adventure with real live dinosaurs ("When We Woke").

The eggs begin to hatch and, as the Baby Dinosaurs emerge, they marvel at the wonders of the world into which they are being born ("Wonder"). Annie and Jack go to find food for the babies and discover a watering hole – the only place where plant eaters and meat eaters gather together. They watch as a variety of dinosaurs gather at the watering hole ("March of the Dinosaurs").

The peaceful scene at the watering hole is interrupted by the terrifying arrival of a Tyrannosaurus Rex ("Roar"). The Triceratopses distract the T-Rex while Jack and Annie run back to the tree house, but when they get there, Jack realizes he has forgotten his backpack and has to go back to get it. Jack races back and retrieves his backpack, but before he can return to the tree house, the T-Rex spots him! Jack hides in some ferns and distracts the T-Rex by throwing a rock into another part of the clearing.

Jack is about to make a run for the tree house when Henry arrives with Annie on his back. Henry rescues Jack, and Jack and Annie are thrilled to find themselves flying on the back of a Pteranodon ("When We Woke – Reprise").

Henry delivers Jack and Annie to the tree house, and they share a sad goodbye. Jack tells Annie the reason he had to go back for his backpack: he's figured out that the tree house magic works by pointing to a picture in a book and wishing to go there – and he needed a picture of Frog Creek from his backpack to wish them home. He makes the wish, and they return to the woods where the story began. The Saplings, Stump, Jack and Annie are all excited to see where the tree house will travel next ("How Far Can You See? – Epilogue").