The story centers on 11-year-old Jessica Slocum, Juliet Sorci, whose mother died when she was three. Her father, Jim Slocum, Doug Sheehan, is a workaholic with little time for his daughter and has been mourning her mother for eight years. Just before the Christmas holiday season, Jessica wins a free wish from a wishing well. Her wish for a mother for Christmas is granted by Philomena and Amy Miller, Doris Roberts and Olivia Newton-John, a department store mannequin brought to life to be a mom for Jessica. The catch is Amy can only be a mother until Christmas Eve.
To clear up any confusion for Jim, Amy claims herself to be a nanny from Australia hired to help care for Jessica while he's at work and she is given a spare room on top of the garage. Amy and Jessica get along until they suffer a brief misunderstanding. Jessica briefly wants to take back the wish and sees Amy go lifeless from her bedroom window. Horrified, she runs out in the rain and stares toward Amy's room, but Amy opens the door and Jessica is relieved to see her fine as she is ushered in. The next day, Jessica visits Philomena at the department store to see if she could take back the original wish. She wants Amy to stay forever with them because her father has grown fond of her and she can't bear to lose another mother. Philomena tells Jessica there is only one way to alter the outcome, and shows her what Amy will be up against if she isn't there to save her and the other mannequins with faces. The store she works at is planning to replace all the mannequins with faceless ones. Philomena tells Jessica there is only one way to save Amy, and they must act fast and join hands with her.
That isn't the only thing Amy is up against: an inquisitive store detective Det. Price, Greg Procaccino, suspects her of taking a missing Santa mannequin (needed for Jessica's Christmas pageant) from the store and questions her. However, Amy's mannequin friends come to her aid, especially a male mannequin dressed as a driver who warns him to keep his distance. Amy and the Santa mannequin both help Jessica overcome her stage fright and put on a convincing performance that wow's the crowd. Jim takes a photograph of Jessica, his first picture of her since her mother died.
Christmas Eve and Philomena is late to perform the ritual needed to save Amy so she has to return to the store. Jessica recruits Jim to help save her and they head to the store. By the time they reach the store, they see Amy having gone back to being a mannequin and Jessica begs her father to grab Amy's hand and he reluctantly does. The ritual works and Amy is brought back before them. They head for home and Amy's mannequin friends wish her the best of luck in her new life, while the store detective is awakened by Philomena using her magic feather duster. The film ends with a Christmas picture of Jim, Amy and Jessica.
