Teddy Ruxpin and his best friend Grubby travel to the Land of Grundo in search of a long-lost treasure. With the aid of brilliant inventor Newton Gimmick, they rescue a kidnapped princess and find themselves in the possession of six magical crystals, each with its own special powers. With the help of many new friends, the trio travel across the land, discovering the power of each crystal and uncovering incredible mysteries, all while thwarting the dastardly villain Tweeg. Unbeknownst to the heroes, the evil Supreme Oppressor, Quellor, and his Monsters and Villains Organization, are determined to take the crystals and use them to plunge Grundo and its inhabitants into perpetual darkness.
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Teddy and Grubby meet the scientist Newton Gimmick. The three friends search for the treasure, while Tweeg and L.B. devise a sinister plan to divert them and find the treasure first.
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Jack takes the five Crystals (four real, one fake) to MAVO HQ and gives them to Quellor. A celebration is held in honor of the find, and the Understander of Legends installs them in the MAVO ceiling. The Trio shrink themselves and the Airship and infiltrate MAVO HQ, and quietly replace the real Crystals with fakes, starting a brawl along the way. The Airship slips away during the commotion.
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Teddy and Grubby run into a group of Fobs who have lost their color. This leads them to enlist Wooly to climb to the top of Rainbow Falls, where he finds a boulder blocking the water where it runs from a cave. Wooly removes the rock, and the water resumes flowing. The Fobs drink the water, and get their color back.
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Tweeg sets out to sell miracle cures to the residents of Gimmick's Valley in order to pay his MAVO membership dues. He winds up talking the Trio into buying "cures" for "ailments" by playing on their insecurities (Gimmick's baldness, Teddy's shortness, and Grubby's lack of handsomeness). The Trio eventually realize they've been swindled, and vow to be happy with the way they are.
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Tweeg wakes up with discolored skin, and becomes convinced he's ill with the "Tweezles". LB asks the Trio to help his boss, and they head for the Tower. After each of them puts forth their remedy for Tweeg, Gimmick realizes that Jack is suffering from pigmentation caused by drinking water from Rainbow Falls.
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Tweeg wakes up with discolored skin, and becomes convinced he's ill with the "Tweezles". LB asks the Trio to help his boss, and they head for the Tower. After each of them puts forth their remedy for Tweeg, Gimmick realizes that Jack is suffering from pigmentation caused by drinking water from Rainbow Falls.
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The Trio have dinner at Wooly's when a storm hits. Wooly helps the Trio save the tree where Leota the Woodsprite teaches school, and in exchange,offers to educate Wooly.
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Grubby eats a Shush Bush while in the forest, which paralyzes his voice box and renders him mute. Leota then introduces the Trio to sign language to communicate with Grubby until he gets his voice back.
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