Arthur Christmas uncovers the astonishing, previously unknown response to every child's most pressing question: "How does Santa manage to deliver all those presents in just one night?" The revelation lies in Santa's thrilling, cutting-edge operation, complete with a spaceship for gift delivery, cleverly concealed beneath the North Pole. At the heart of this tale is Arthur, the endearing but clumsy son of Santa, who genuinely cares for the wishes of every child across the globe. Alongside him is Steve, who possesses a strict, military mindset and is essential in keeping the operation running smoothly. Steve anticipates being handed the reins by Santa, mirroring the transition that occurred years before when Santa's father passively did the same.
However, following their 70th successful mission, Santa fails to announce this anticipated handover, leaving Steve feeling let down and disillusioned. That very night, an elf discovers a critical oversight: one gift remains undelivered. Arthur, disheartened by the news, is persuaded by Steve that it is impossible to deliver this lonely gift without placing the elves at risk or incurring significant costs. Just when all seems lost, Grandpa Santa reveals that there is a way forward. He unveils the family sleigh and reindeer, inviting Arthur to join him in delivering the gift before dawn breaks over England.
Despite Grandpa's outdated knowledge of maps leading them astray to Toronto, across the Atlantic Ocean, and then to Africa—which he mistakenly thinks is France—they face numerous challenges, including an encounter with ferocious lions that leaves their sleigh damaged, including Grandpa's cherished camera. For Grandpa Santa, proving he accomplished the delivery in his own way is far more important than the wishes of a little girl.
While still hopeful, Arthur and Grandpa set their sights on Cornwall, but a misinput in the GPS sends them to Mexico instead—where all gifts have already been successfully delivered. Urged by Steve to return home, Arthur is disheartened yet remains determined, unwilling to forsake the girl waiting for her gift. Amidst this chaos, the elves catch wind of the missed delivery and awaken Santa, who struggles to convey his intent to fix the situation. In a shocking twist, they discover Grandpa and Arthur have ended up on the coast of Cuba after falling from their sleigh.
Fueled by determination, Arthur harnesses the power of magic dust to reclaim the sleigh and heads back towards England. Simultaneously, Santa takes it upon himself to reach the child, commandeering the spaceship but lacking the skills needed to pilot it. Steve jumps into the cockpit to guide him, and as they launch, the elves anxiously misconstrue the departure as abandonment of the child’s wishes, triggering the auto-destruct mechanism at the North Pole.
Meanwhile, NORAD receives reports of the "alien invasion" from Grandpa's sleigh and enacts a drone response. As they approach Cornwall, Grandpa heroically sacrifices the sleigh to allow Arthur and the reindeer to continue their mission. However, Steve makes yet another error, landing in Cornwall, Mexico instead of Cornwall, England. Just as the sun begins to rise, Arthur arrives at the child's doorstep, only to realize he may have missed the opportunity. In a miraculous turn, Santa arrives with the spaceship, utilizing its camouflage feature to shroud Cornwall in darkness once more.
With the elves witnessing Arthur's heartfelt efforts to bring happiness to the child, they halt the self-destruct countdown. In a dramatic climax, all three Santas arrive at the house simultaneously, allowing Arthur to deliver the long-awaited gift. Together, they hide in the closet to witness the child's joyous reaction, bringing immense joy to her face. Santa concedes to Steve that he recognizes the need to have Arthur take on the Santa mantle, and thus a new era begins.
The following year, Santa steps down and joins Grandpa, while Steve becomes the Chief Operating Officer of their enterprise. Arthur embraces his role as the new Santa, introducing a charming twist by renaming the spaceship "Eve"—a tribute to the old sleigh—and ensuring it’s now drawn by a magnificent team of 5,000 reindeer powered by magic dust.
