After a meteor shower strikes near the Great Valley, a severe drought begins to threaten the survival of its inhabitants. The meteorites cause a notable decrease in water supply, and Mr. Threehorn, [Kenneth Mars], becomes extremely protective of the remaining water sources. His behavior becomes increasingly aggressive and dismissive towards the other dinosaurs, which prompts Littlefoot and his friends to embark on a quest to find more water in hopes of saving their community.
During their search, they encounter a group of teenage dinosaurs: a Hypsilophodon named Hyp, a Muttaburrasaurus called Mutt, and a Nodosaurus named Nod. These young dinosaurs are somewhat mischievous and unwelcome, as they inadvertently cause trouble by chasing Mr. Threehorn, who mistakenly believes that Littlefoot and his friends are bad influences. Despite this, the children manage to find a small lake, but their discovery is threatened by the bullies who arrive and claim the waterhole for themselves, demanding that Littlefoot's group stay silent about it.
In their attempt to escape the bullies, the children are chased but manage to evade them when Hyp, Mutt, and Nod are frightened away by a wasp. During the chaos, the children discover the real reason behind the obstruction of the water source—a natural blockage that had previously contained the water. Just as they plan to tell the other inhabitants, a lightning strike ignites a fire in a nearby tree, escalating rapidly into a wildfire that spreads through the Great Valley.
Faced with this new danger, the dinosaurs flee to the safety of the Mysterious Beyond, standing at the edge, trying to survive the devastation. When the children finally share their findings with the elders, disagreements erupt over the best course of action. Meanwhile, the teenagers—Hyp, Mutt, and Nod—venture into the Mysterious Beyond to seek water, driven by the desire to win the race or find the new water source first. Recognizing their common danger, Littlefoot and his friends follow, offering help if needed.
Their journey takes a turn when Hyp mistakenly believes a tar pit is water and gets stuck. The children rally together to rescue him, and the adults arrive just in time to scold Hyp. Mr. Threehorn gives a heartfelt lecture, recognizing that Hyp's behavior is a result of mistreatment from his own father, Nicholas Guest. Feeling sympathy for Hyp, Mr. Threehorn advises his own son on understanding and kindness, recognizing that bullying often stems from being mistreated.
With renewed cooperation, the herd decides to work as a team to find water. However, their efforts are interrupted when they are ambushed by a pack of Velociraptors. A tense battle ensues, leading the Velociraptors and the adults directly to a dam of boulders created by the meteorites. As the Velociraptors fight the herd and the adults struggle to hold the dam, the children, including Hyp and his crew, take a brave step forward—they work together to break the dam and release the stored water.
The sudden rush of water crashes through the valley, washing away the Velociraptors and dousing the still-burning fires. The dinosaurs, soaked and exhausted, manage to land safely on the opposite bank. Upon returning to their devastated home, they discover that most of their lush, green food has been destroyed by the wildfire. Fortunately, they find patches of still-verdant land in the Great Valley, where food remains plentiful. The community cooperatively moves from one lush area to another, sharing resources and helping each other survive.
This collective effort and spirit of generosity mark what becomes known as the Time of the Great Giving—a time where cooperation and kindness help them overcome adversity, rebuild, and learn the importance of working together in the face of natural calamities.
