Ten-year-old Bastian Bux is a timid outcast grappling with the recent loss of his mother and living with a father who expresses concern about his son's tendency to daydream. One morning, after seeing Bastian sketch unicorns in his math book, his father urges him to abandon his fantasies and face the mundane reality of life. While making his way to school, Bastian is cornered by a group of bullies and finds refuge in a local bookstore run by the grumpy Mr. Coreander. Intrigued by the book Coreander is reading, Bastian inquires, but the bookseller warns him against it, stating it’s not a “safe” story like others. Driven by curiosity, Bastian steals the book titled The Neverending Story, leaving a note to return it and retreats to the attic of his school to read in peace.
As he delves into the book, Bastian discovers the enchanting but perilous world of Fantasia, which is gradually being consumed by a dark and ominous force known as "The Nothing." At the center of this struggle is the Childlike Empress, who has fallen ill, prompting a young warrior named Atreyu, portrayed by Noah Hathaway, to embark on a quest to find a cure. Equipped with the protective medallion called the Auryn, Atreyu sets forth on a heroic journey only to find that the Nothing has dispatched a ferocious and cunning wolf-like creature, Gmork, to thwart his mission.
Atreyu's adventure leads him to the wise and ancient turtle-like advisor, Morla, who resides in the ominous Swamps of Sadness. This place is perilous; those who succumb to the overwhelming sadness will sink into its deadly muck. Tragically, as Atreyu navigates through the swamp, his loyal horse Artax is overwhelmed by despair and perishes, leaving Atreyu heartbroken and solitary. Morla, indifferent and riddled with allergies to young beings, offers no assistance and merely points Atreyu towards the distant Southern Oracle.
As Atreyu pushes onward, weary and disheartened, he is nearly swallowed by the swamp's treachery when he is miraculously rescued by Falkor, a luck dragon who whisks him away to the home of two gnomes near the gates of the Southern Oracle. Upon reaching the first gate and then the second—a reflective portal that reveals one's true self—Atreyu is startled to see the reflection of Bastian himself. Finally meeting the Southern Oracle, Atreyu learns the only way to rescue the Empress is to find a human child from the real world who can give her a new name. Bastian, lost in the narrative, muses that he would name the Empress after his late mother, a poignant connection between his grief and the unfolding tale.
As Atreyu and Falkor flee, the Nothing consumes the Southern Oracle, escalating the danger. Atreyu finds himself unceremoniously hurled into the Sea of Possibilities, losing the Auryn in the process. He awakens on the shores of deserted ruins, where murals depicting his journey—including one of Gmork—come to life. Eventually, Gmork confronts Atreyu, explaining that Fantasia embodies human imagination—limitless and vibrant—while the Nothing signifies lost hopes and dreams. In a valiant showdown, Atreyu defeats Gmork as the ruins begin to crumble around them.
With the Auryn recovered by Falkor, they find themselves in a desolate void, haunted by the notion they have failed, until they catch sight of the Empress's Ivory Tower among the remnants. Inside, Atreyu apologizes for his perceived failure, but the Empress reveals that he has brought a human child—Bastian—who has been rooting for him throughout this adventure. She explains the profound truth: “as Bastian follows Atreyu's story, others are following his,” emphasizing the interconnectedness of their journeys. To save Fantasia from the encroaching Nothing, Bastian must call out the Empress's new name. Initially disbelieving and reluctant, Bastian recalls his father’s words and struggles against his own disbelief. Ultimately, after the Empress urgently implores him, he rushes to the attic window and cries out, “Moonchild!”
Bastian awakens in the Empress's presence, who gifts him a grain of sand—the last remnant of Fantasia. She tells him that with his imagination, he holds the power to completely resurrect Fantasia. Armed with this ability, Bastian conjures Fantasia back to life, soaring through the skies on Falkor's back, experiencing the rebirth of the land and its inhabitants, including Atreyu and Artax. When Falkor asks what Bastian's next wish will be, he decides to bring Falkor into the real world to confront the school bullies. The tale concludes with a hint that Bastian will go on to have numerous additional adventures, but those tales are yet another story to be told.
