In Lowell, Massachusetts, Christmas has always held a special place in the hearts of the Pierce family. However, in 2018, tragedy strikes when the family's patriarch, Doug ([Oliver Hudson]), a dedicated firefighter, loses his life in the line of duty. This heartbreaking event leaves the matriarch, Claire ([Kimberly Williams-Paisley]), struggling to keep the family united, particularly her oldest son, Teddy ([Judah Lewis]), who is now entangled in a life of crime, including stealing cars. Despite the chaos, the youngest sibling, Kate ([Darby Camp]), fervently attempts to preserve the spirit of Christmas.
On Christmas Eve, Claire is called to cover a coworker's shift, leaving Teddy in charge of Kate. As they review old holiday videos, Kate notices an unusual arm emerge from the fireplace. Convinced it’s Santa Claus ([Kurt Russell]) ([kurt-russell]), she persuades Teddy to help prove his existence. Skeptical at first, Teddy reluctantly agrees after Kate blackmails him with footage of his recent criminal activities. Together, they rig a trip wire by the fireplace linked to a bell and set up a hidden camera, eagerly anticipating the arrival of Santa.
Suddenly, the bell jingles, waking Kate, who glimpses Santa in their living room, but he vanishes before Teddy can witness him. The siblings rush outside to hear Santa on the roof, where they witness his sleigh and reindeer gliding overhead. In a moment of excitement, Kate chooses to hide in the sleigh, much to Teddy's dismay. The adventure takes a wild turn when Santa returns to the sleigh, inadvertently taking the children along for a ride. However, chaos ensues when Santa loses control, resulting in a crash in Chicago, Illinois, scattering the reindeer and losing his precious bag of presents.
After the crash, Santa introduces himself to the astonished children, revealing that he must return to his duties quickly, or risk losing the Christmas Spirit entirely—a scenario that previously resulted in the Dark Ages. Without his magical hat, which was lost in the mishap, Santa struggles to navigate through tight spaces, prompting the children to assist him in retrieving it. They stop at a bar where Santa attempts to connect with patrons by recalling their past Christmas wishes, but when that fails, they resort to stealing a Dodge Challenger, which happens to be in the possession of an ex-convict.
Inside the car, Santa improvises a radio from miscellaneous items to communicate with the police as they search for his reindeer. When they finally locate the reindeer, the situation becomes tense as they encounter Officers Povenda ([Martin Roach]) and Jameson ([Lamorne Morris]). While Kate courageously chases after the reindeer, Santa and Teddy operate a distraction. However, the children soon find themselves in trouble as they are confronted by a gang that steals Teddy and the bag.
In a parallel storyline, Kate finds herself teleported to the North Pole, where she discovers a heartfelt letter from Teddy and meets Santa's elves. They eventually come to her aid, motivated by her belief in the magic of Christmas. Meanwhile, Teddy fights off thugs while trying to explain the chaotic situation to the authorities. Santa experiences his own trials at the precinct, where his belief in Christmas is put to the test as he performs a rousing rendition of "Santa Claus Is Back in Town" to sway skeptical officers.
With little time until dawn, the kids join forces with Santa, who speeds up their operations to deliver the remaining presents, with Teddy taking the reins of the sleigh. Against the clock, assisted by the elves, they accomplish the task just in time. After returning the children home, Santa gifts Teddy with his hat as a sign of the bond they’ve built, and Kate excitedly records everything, only to find that Santa has mysteriously taken the tape.
When Claire arrives home, the family is greeted by a living room adorned with decorations reminiscent of their late father. Among the gifts, Kate discovers a skateboard, while Teddy receives a letter explaining Santa's inability to fulfill his wish alongside a cherished ornament. When hung on the tree, the ornament unveils a vision of their dad, prompting them to express their pride in one another.
Back in the North Pole, Santa updates his list of True Believers, finally including Teddy's name, as Mrs. Claus ([Goldie Hawn]) returns with firewood. As they reminisce about the night’s escapades, Santa decides to share his adventure with a wink, showcasing the replay of their magical journey.
