Jack [Masachika Ichimura] resides with his mother in a small rural house, and their poverty pushes them to make a difficult choice: sell their cow, the animal that still offers a small hope of milk for the family. A mysterious man offers something in exchange for the cow, and Jack trades it for a handful of “magic” beans. His mother’s anger boils over, she spanks him with a broom, and in a moment of frustration she tosses the beans out the window. That night, a miraculous transformation unfolds: a towering beanstalk sprouts, and Jack’s dog Crosby [Kazuo Kamimura] watches in astonishment as a mouse in a dress and hennin named Laura descends from the stalk. Jack wakes to the sight and is equally amazed, and Laura urges him to join her ascent with Crosby.
At the summit, the trio lands in the castle courtyard and meets a girl who appears entranced by their arrival. She is Princess Margaret [Linda Yamamoto], the daughter of a king and queen who were killed by a Witch. Margaret insists she is happy because she is about to wed her beloved prince, Tulip, whom she believes is a noble suitor—unaware that Tulip is actually a giant in disguise. Margaret introduces Jack to Tulip’s mother, Madame Hecuba [Kirin Kiki], a cunning witch who harbors grand ambitions to rule the Land of the Clouds through that very marriage. Hecuba leads Jack into an upstairs dining hall where she serves him soup intended to lull him into sleep so she can feast on him and reclaim her youth. The moment is chaotic when Tulip, not the sharpest, arrives—Jack must hide quickly as the giant becomes suspicious.
Beyond this tense moment, Jack encounters more strange allies: three cloaked mice—Nigel, Tammy, and George—and a talking harp. The harp seems divided at first, but with Jack and the mice’s persuasion she agrees to cooperate, revealing a grim truth: Hecuba destroyed the king and queen and transformed the castle’s people into mice. In a treasure room, Tulip discovers a golden hen that lays another golden egg, and the harp adds a crucial detail: the witch’s spell requires daily renewal to keep the people under control.
Driven by necessity, Jack decides to seize the hen and as much treasure as he can carry, then makes his way back down the beanstalk. He fools Tulip into thinking he has fallen to his doom, and back in the kitchen he and his mother celebrate their newfound fortune. Crosby, however, urges Jack to act again to stop Margaret from marrying the giant.
With renewed determination, Jack climbs the beanstalk a second time. The harp reveals that the spell over Margaret can be broken with a kiss from someone truly brave. Jack interrupts the wedding ceremony, and a kiss from him frees Margaret from the witch’s control. Margaret returns to her true self, aware that her parents were killed by the witch, while Tulip floods with rage that Margaret does not truly love him. A chase erupts, and Jack confronts Madame Hecuba once more. Tulip storms into the room and, tired of his mother’s abuse, ultimately turns on her, stepping on the witch.
With Hecuba defeated, the magic is undone: the mice revert to people, and the castle begins to return to its former, livelier state. The giant remains, however, and he pursues Jack and Crosby. The two manage to escape down the beanstalk, chopping it down at the base as Tulip drops to his death below. In the quiet that follows, Jack and Crosby look up toward the clouds and think of their friends who are gone, yet not forgotten, in the sky.
