Act One

When he sits down to watch TV after his Christmas deliveries and realizes that the football game he tried to TiVo has been recorded over, Santa decides to tell the Christmas story of Buddy, the Elf.

Lights up on Buddy, an oversized elf, excitedly getting ready for another day's work in Santa's workshop ("Happy All The Time"). At work, Charlie, the shop manager, informs the Elves that they must work twice as hard this year because more and more humans no longer believe in Santa, and that Christmas spirit is what makes Santa's sleigh fly. Later, Charlie checks on Buddy's progress at making toys. As usual, he is way behind the others and feels terrible about it. Charlie asks him to take a break and, as he does, Buddy overhears a conversation in which Charlie reveals that Buddy is actually a human — Buddy's worst nightmare. Santa sits Buddy down and tells him the story of how he accidentally brought him back to the North Pole when Buddy's mother died. He tells Buddy that his father lives and works in New York City but is on the "naughty list". Determined to save his father with Christmas spirit, Buddy sets off for New York ("World's Greatest Dad").

When he arrives at the office of his father, Walter, in the Empire State Building, Buddy finds him ranting to his wife and son about Christmas being a complete annoyance ("In the Way"). Walter is stunned to hear Buddy's declaration that he is his son and calls security to take him away. They drop him at Macy's, where a manager mistakes him for an employee, sent down from the corporate office to check on things. As they decorate the store, all of the employees begrudge their overly happy new co-worker until they, too, catch Buddy's infectious Christmas spirit ("Sparklejollytwinklejingley"). When everyone goes to leave for the night, Buddy asks Jovie, his favorite co-worker, on a date. She accepts. The next morning, a department store Santa arrives. Buddy accuses him of being a fake, and they fight. The police are called and take Buddy to his father's apartment.

Emily and Michael are at home, trying in vain to build Michael's science project. Buddy agrees to help if they will, in turn, muster up some Christmas spirit to write letters to Santa. They sit down to ask for the one thing they never get: some quality time with Walter ("I'll Believe in You"). Buddy fixes the science project to high-fives and hugs just as Walter walks in. Resistant at first, Emily talks him into allowing Buddy to stay the night. In the morning, a Fed-Ex man arrives with the results of a DNA test. When they first met, Emily plucked one of Buddy's hairs to send off for testing, and the results confirm that he is Walter's son ("In the Way – Reprise"). Buddy is elated, but Walter is not... especially since he must take Buddy with him to work so Emily can attend a meeting.

Newly clothed in a business suit, Buddy is excited to accompany Walter to work ("Just Like Him"). When Walter's boss comes in and threatens to fire him, Buddy's rambunctious curiosity and playfulness are not a welcome distraction. Later that night, Jovie and Buddy go on their date. At first, it isn't going well, but things soon turn around. Buddy promises to give Jovie a real Christmas, starting with a Christmas Eve dinner at Tavern on the Green like she's always dreamed ("A Christmas Song"). They kiss. Meanwhile, Walter is still at work and has just been given a manuscript for a children's story that could save his job. Buddy bursts in to tell Walter that he's in love and, while Walter talks with colleagues, Buddy decides to make "snow" by putting the manuscript through the shredder. With the manuscript destroyed, Walter explodes with anger and tells Buddy to get out of the apartment and his life ("World's Greatest Dad – Reprise").

Act Two

The Santa from the beginning of the play hurries back from intermission to take up the tale of Buddy, the Elf, once again.

Back at the apartment, Buddy leaves a letter to apologize and say goodbye to Walter, Emily and Michael. He then wanders NYC until he ends up at a Chinese restaurant with several other "Santas" and "Elves" on Christmas Eve. They complain about the state of Christmas and children these days ("Nobody Cares about Santa"). When they leave to return home to their families, Buddy remembers that he was supposed to go on another date with Jovie. Elsewhere, she waits in front of Tavern on the Green, upset that Buddy is two hours late ("Never Fall in Love"). Buddy arrives, apologizes and gives Jovie the snowglobe that Santa gave him when he left the North Pole. Still upset, Jovie leaves.

When Emily and Michael find Buddy's note, they are deeply saddened. Emily tells Michael that, although she loves him, Buddy is crazy for believing in Santa at thirty years of age. Just then, Santa's sleigh flies through the sky and makes a renewed believer out of both of them ("There Is a Santa Claus"). They rush to Walter's office to tell him, finding him desperately trying to come up with an idea for a new children's book before his boss arrives to hear the pitch. The boss, Greenway, arrives and, as Walter begins his awful pitch, Buddy enters. As a present to Walter, Buddy gives Greenway the story of Buddy the Elf ("The Story of Buddy the Elf"). Greenway loves it, but he wants to change the elf to a horse... and he wants Walter to work on it all through Christmas Eve and the next day. Walter quits, having finally decided to spend time with his family, as Greenway storms out.

When Michael tells Buddy that they saw Santa's sleigh land, Buddy realizes that the sleigh has run out of the Christmas spirit that allows it to run. They run to help, finding Santa sitting glumly beside his sled ("Nobody Cares About Santa – Reprise"). Buddy spots a camera news crew nearby and grabs the microphone to beg all of New York to believe, sing and spread Christmas spirit so that Santa can fly again. Jovie arrives and is convinced, as other random New Yorkers join the movement ("A Christmas Song – Reprise") and Santa's sleigh again takes flight. Santa invites Buddy to return to the North Pole with him, but Buddy decides to stay, finally feeling like he belongs.

We transition back to the Santa that began both acts as he closes the storybook and goes to answer the knock at the door. In enters Michael, Emily, Walter, Buddy, Jovie... and their new baby, Buddy Hobbs, to celebrate Christmas as they now do every year ("Finale").