Alice, portrayed by Kathryn Beaumont, finds herself utterly uninterested as her older sister reads from a history book. Yearning for something extraordinary, Alice is captivated when she spots a White Rabbit dressed in a waistcoat, obsessively checking his watch. Following him with her curious cat, Dinah, she tumbles down a rabbit hole into a wonderland filled with whimsy and wonder, leaving Dinah behind.
Upon landing, Alice encounters a vast, chamber-like hall, only for the White Rabbit to slip through a tiny door. The clever Doorknob advises her to drink from a bottle labeled "Drink me," which causes Alice to shrink to a minuscule size. As she tries to reach a key resting on a table, frustration mounts. The Doorknob suggests consuming a cookie marked "Eat me," leading Alice to grow so large that her head strikes the ceiling, inducing tears that flood the room. Spotting that the bottle still holds a drop, she consumes it, shrinking down and ultimately drifting through the keyhole into a sea of her own tears.
On the shore, Alice meets a Dodo bird who organizes a chaotic caucus race with a group of animals, all futilely trying to dry off. Next, she encounters the comically paired twin brothers, Tweedledum and Tweedledee, voiced by J. Pat O'Malley, who recite “The Walrus and the Carpenter.” Later, after sneaking into the White Rabbit's house, Alice is mistakenly identified as his maid before growing to a size that traps her inside. Attempts to rescue her backfire as the Dodo sends Bill the Lizard down the chimney, and a fire is ignited; however, a carrot from the garden helps Alice shrink again.
As Alice sings “All in the Golden Afternoon” with a vibrant garden of talking flowers, her adventure continues when she chases the White Rabbit. Inside a garden filled with animated flowers and peculiar insects, Alice initially befriends them, only to be mistaken for a weed, which leads to her expulsion. Engaging with a hookah-smoking caterpillar, she receives cryptic advice about a mushroom, nibbling on pieces alternately to change her size at will — first growing enormous, which angers a nesting mother bird, and then shrinking down again.
Eventually, through perseverance, Alice regains her normal size, storing the mushroom pieces in her apron. Guidance from the enigmatic Cheshire Cat, voiced by Sterling Holloway, leads her to the garden of the March Hare, brought to life by Jerry Colonna, who celebrates his "Un-birthday" alongside the Mad Hatter, played by Ed Wynn, and the Dormouse. Frustrated by their outlandish behavior, Alice chooses to abandon her pursuit of the White Rabbit and heads home. However, she soon finds herself lost in the bizarre Tulgey Wood, only to be rescued by the Cheshire Cat, who reveals a shortcut out.
In a hedge maze, Alice witnesses playing cards painting white roses red before encountering the temperamental Queen of Hearts, voiced by Verna Felton, along with the King and an army of cards. The Queen, furious and volatile, invites Alice to a croquet match using whimsical flamingo mallets and hedgehog balls. Amid the chaos, the Cheshire Cat plays a prank, leading to the Queen blaming Alice, who is soon put on trial.
During the trial, Alice’s nonsensical companions, the Mad Hatter, March Hare, and Dormouse, provide no assistance. The Cheshire Cat’s appearance allows Alice to consume more mushroom, causing her to grow massively once again. In her giant form, she reproaches the flustered Queen for her recklessness, but she begins to shrink back. As the Queen hollers, "Off with her head!" a wild chase ensues.
Returning to the Doorknob, Alice learns she’s already on the other side of a locked door. Peering through the keyhole, she sees herself asleep in the park. In a moment of urgency, she calls out to her dream self, "Alice, wake up!" until she gradually stirs to the sound of her sister's voice. Together, they head home for teatime, as Alice reflects on her surreal adventures, pondering the purpose of logic and reason, while her sister smiles fondly, recognizing that Alice is still young but will inevitably grow up one day.
