Oliver Greening, played by Martin Short, is a talented carriage driver with big dreams of making it to Broadway. Despite giving an outstanding audition for a new musical adaptation of A Tale of Two Cities, he is unfortunately overlooked in favor of the more established and commercially appealing Tony Sable, who is considered a safer bet by the producers. This setback leaves Oliver feeling disheartened but still determined to succeed.
That night, Oliver's young daughter, Anabel, is having trouble convincing her brother Charlie that fairy godmothers truly exist. As they fall asleep, Anabel is surprised to awaken and find Murray, played by a male fairy godmother, who is often looked down upon because of his gender in a profession dominated by women. Murray, despite facing disdain from others, agrees to grant Anabel's wish that her father land the part and avoid having to move to Nebraska. His hope is that by helping Oliver, he will earn respect and be taken seriously.
The story intensifies at the North American Fairy Godmothers Association (NAFGA) annual meeting, overseen by the head fairy godmother, Hortence. During the event, all fairy wands are supposed to be turned in to prevent misuse. However, Claudia, played by Kathleen Turner, an evil witch who was banished from NAFGA for her selfish stewardship of magic, sneaks into the gathering. She curses Hortence by turning her into paper and steals all the wands, except Murray’s, which he left behind in his rush to attend. This oversight leads to a series of chaotic incidents.
When Anabel tries to return Murray’s wand after Charlie accidentally breaks it, her attempt results in a series of mishaps. She glues the broken pieces back together and gives it to Murray, but a failed attempt at instant travel lands her and Murray in Nebraska instead of the intended destination. Their adventure continues at the Central Park zoo after a run-in with Duane, a local man furious at their presence. Murray’s attempt to turn Duane into a tiny rabbit backfires, transforming him into a giant rabbi instead. Just as Duane, now a giant, is about to stomp on them, Murray casts another spell, and they are transported away again.
Later, Anabel begs Murray to help her with her father’s misfortune, but in a comical mistake, Murray transforms Oliver into a statue. The trio then seeks Hortence’s help, only to discover that she is still under Claudia’s curse. While fixing his wand with Charlie’s assistance, Murray learns that Anabel must break Murray's spell before midnight, or Oliver will be forever frozen as a statue. Meanwhile, Claudia begins to realize that Hortence secretly gave her wand to Murray, which could restore her full power if she manages to reclaim it.
In the meantime, at the theater, Anabel tries to sabotage Tony Sable’s audition to help Oliver get the role. Murray first attempts to make it rain on stage, but the effort is dismissed as a technical malfunction. Then, she asks him to give Sable a “frog in his throat,” and this time Murray takes her request literally, causing frogs to hop out of Sable’s mouth and shocking the audience. Nonetheless, Sable gets cast, as the director, Lord Richard, prefers to rush production and doesn’t want to wait for Oliver.
Things take a darker turn when Boots, Claudia’s loyal dog-turned-human servant, finds the fairy godmothers. Claimed to be Claudia’s pet, Boots is tricked into bringing them to Claudia’s lair. Claudia, played by Amanda Plummer, demands the wand, and when they refuse, she uses magic to force them into a dance until they tire out. While Charlie distracts Claudia, Anabel and Murray work together to retrieve the wand. Boots seizes the opportunity to snatch it, and Murray then cleverly manipulates Boots’ discontent with Claudia’s mistreatment to turn her against her mistress.
In the climax, Murray tricks Claudia into a spell that traps her within her own magic mirror. He shatters the mirror, imprisoning her permanently. With Claudia’s evil out of the way, the fairy godmothers, Murray among them, return to Central Park. They successfully restore Oliver, who is then cast as the understudy for Sable. To help grant Anabel’s wish, Murray causes Sable to slip on a bucket, injuring his ankle and prompting his firing. Oliver then gets his chance to shine, stepping into the lead role.
The story wraps up with Charlie, Anabel, Murray, and the other fairy godmothers enjoying the show, celebrating the victory of kindness, perseverance, and believing in magic when it counts the most.
