An older woman begins narrating the tale of her father, Elmer Elevator (Jacob Tremblay), during his childhood. Once upon a time, Elmer and his mother, Dela (Golshifteh Farahani), ran a charming candy shop in a quaint town, but they were soon compelled to shut it down and move away as the community dwindled. Relocating to a distant city, they aspired to establish a new shop, but the harsh reality soon saw them deplete their savings just to make ends meet. Dela faced tremendous challenges in finding stable employment, barely managing to pay the rent to Mrs. McClaren (Rita Moreno).
Amid these trying times, Elmer encounters a peculiar cat (Whoopi Goldberg), who becomes his unexpected friend. In need of funds for their shop, Elmer contemplates panhandling, but his mother dismisses the idea as futile. Frustrated and feeling isolated, he escapes to the docks, where the cat surprises him by speaking. She reveals that on Wild Island, located beyond the city, lives a dragon who may prove to be their salvation. Encouraged, Elmer embarks on an adventure with the help of a gregarious whale named Soda (Judy Greer) who transports him to the island.
Arriving on Wild Island, Soda informs Elmer about a gorilla named Saiwa (Ian McShane) who is employing the dragon to prevent the island from sinking—a task that is increasingly unsuccessful. As the island submerges, it requires frequent aid from Boris ([Gaten Matarazzo]), the dragon who has yet to discover the correct method to stabilize it. Elmer resolves to release Boris from bondage, resulting in a partnership where they seek a wise tortoise named Aratuah, believed to possess the knowledge to truly save the island.
Boris, a comical character, shares that he has been performing this duty for generations, but he has not yet transitioned into an "After Dragon," which he will become upon successfully saving the island on his 100th birthday in dragon years. However, he is hindered by his inability to fly due to an injury sustained while escaping from Saiwa's men, specifically from Kwan (Chris O'Dowd). Their bond grows as Elmer and Boris agree on a plan: Boris will help Elmer gather enough money for the store in exchange for his freedom.
As their quest unfolds, they meet various peculiar inhabitants of the island including Cornelius the crocodile (Alan Cumming), tiger siblings Sasha (Leighton Meester) and George, and a mother rhino named Iris (Dianne Wiest). Together, they face the challenges presented by Saiwa and his monkey army, who are adamant about preventing Elmer and Boris from succeeding. When Saiwa confronts them, Iris cleverly conceals Boris and Elmer, claiming they've headed toward the island's summit.
As Elmer and Boris strive to reach Aratuah, the island sinks further. Just when Kwan nearly captures Boris, Saiwa intervenes, asserting the need to prioritize rescuing the monkeys from rising tides. Upon reaching Aratuah’s shell, Elmer learns the tortoise has passed away, deepening their plight as they retreat.
While they rest, Saiwa and his forces discover them and Boris is captured, though this inadvertently repairs his injured wing. With newfound strength, he takes flight with Elmer. In the midst of their escape, Saiwa confesses that he knew of Aratuah’s demise and feared the potential panic that would ensue among the islanders. He urges Elmer to reconsider his approach using Boris solely for his own benefit.
Realizing the island’s true issue lies in its roots pulling it down, Elmer encourages Boris to utilize his strength to combat the roots. However, the breakthrough requires Boris to leap into the summit’s fire—a dire move that Elmer hesitates to accept. In a moment of decisive action, Boris manages to spring Elmer into the water below, while he optimistically pursues his plan.
With a climactic leap into the fire, Boris emerges transformed, now an “After Dragon” following his incredible sacrifice, and together, they triumphantly lift the island from the depths of the ocean. With newfound wisdom, Boris instructs the island’s inhabitants on how future dragons can aid in its salvation.
As they return home, Elmer reunites with his mother, bringing their journey to a heartfelt conclusion as they embrace their new life in the city, all under the tender narration of his daughter who reflects on this extraordinary story.
