While a vast circus enjoys its off-season at the "Winter Grounds" in Florida, a group of white storks arrives to deliver babies to the animals. One specific elephant, Mrs. Jumbo, anxiously awaits her baby and continuously searches the skies. As the circus embarks on a new tour, a tardy stork, Timothy, eventually catches up to the moving train and drops off the long-awaited baby elephant, dubbed Jumbo Junior. The circus is pulled by Casey Junior, an animated 2-4-0 tender locomotive.
Initial excitement among the other elephants — Catty, Giddy, and Prissy — quickly turns to delight paired with shock upon seeing that the newcomer has enormous ears, leading them to nickname him "Dumbo." Nonetheless, Mrs. Jumbo showers her little one with affection, defending him against taunts from the other elephants.
Upon arriving at their new location and setting up camp, which the crew laboriously does overnight under heavy rain, Dumbo's enormous ears turn him into an awkward sideshow attraction. A group of mischief-making boys start to pull at Dumbo's ears, prompting Mrs. Jumbo to intervene by punishing their leader and tossing hay bales at them. This results in a confrontation with the ringmaster Herman Bing, a man who, despite lacking true malevolence, is greedy and exploits both workers and animals. Enraged by the treatment of her son, Mrs. Jumbo spirals into a fury, eventually leading to her being considered mad and imprisoned in a cage. Dumbo is left to endure the ostracism from his fellow elephants, blamed for the chaos.
In this challenging time, Timothy, a clever mouse who travels with the circus, takes it upon himself to be Dumbo's friend and mentor. Concocting a plan, he whispers to the sleeping ringmaster, persuading him to perform a new stunt where Dumbo would cap his pyramid of elephants. If only things went as planned; Dumbo stumbles over his ears during the act, toppling the pyramid and injuring the elephants, resulting in Dumbo's exile to the clowns' fireman act, where he makes forlorn leaps from a prop building into a pie filling vat. Despite his newfound fame from this act, Dumbo despairs and falls into a deep melancholy.
Determined to uplift Dumbo's spirits, Timothy devises a meeting with Mrs. Jumbo, but the two can only express their affection through intertwined trunks. Simultaneously, the clowns have an outrageous plan to increase the adrenaline of Dumbo’s act by elevating the jumping platform dangerously high. After a celebration involving champagne, a bottle accidentally falls into a nearby vat of water. Stricken with hiccups following the emotional visit with his mother, Dumbo and Timothy indulge in the water and find themselves inebriated, leading to a wild hallucination featuring pink elephants.
Meanwhile, a group of crows led by Dandy Crow discovers Dumbo and Timothy napping high in a tree. While initially questioning Timothy claims that Dumbo can fly with his ears, their hearts soften upon hearing Dumbo’s sorrowful story. The crows decide to aid Timothy and gift him a "magic feather" as a confidence booster for Dumbo. With the feather in hand, Dumbo manages to take flight again, and he and Timothy return to the circus brimming with excitement to amaze the audience.
During the act, Dumbo prepares to soar from the elevated platform but accidentally releases the feather. Timothy reassures him, insisting that it was merely a psychological crutch. With newfound confidence, Dumbo successfully flies around the big top, captivating the audience and achieving fame and fortune. Timothy becomes his manager, helping him secure a Hollywood contract while Mrs. Jumbo is released from captivity. Mother and son are given a private coach on the train, waving goodbye to the crows as they begin their new journey.
