Cody (Trevor Morgan), his sister Abby (Diana Rice), their best friend Marcella (Kyla Pratt), and their baby brother Fig are dropped off by their parents for a visit at their grandparents' farm. As Cody is believing that there may be nothing to do at the farm, Abby and Marcella rub a Barney doll in his face. Cody loses his patience and starts a game of "keep-away" by taking the Barney doll and running off with it. The two girls go after Cody, who hides the Barney doll in the shower in the bathroom. The girls catch up with Cody, who tells them to use their imagination and laughs when he thinks that nothing happened. However, the doll comes to life as Barney the Dinosaur takes the girls to play in the barn. Cody refuses to believe in Barney at first, claiming that imagination is just for kids and that real dinosaurs neither talk, nor laugh.
That night, Cody takes advice from Barney and wishes for a real adventure for that summer, and to do something no one has ever done before. A shooting star deposits a large colorful egg in the barn which Cody discovers in the morning. Barney and the kids go to tell the grandparents about this, but Barney is distracted by Fig's crying. Grandma suggests to Abby and Marcella that they go see Mrs. Goldfinch. Cody finds Barney who has just changed Fig's wet diaper and takes him to see his grandparents. However, Abby and Marcella take Cody and Barney to see Mrs. Goldfinch, who tells them that the egg is a dream maker. Cody accidentally knocks the egg off the table which lands on a birdseed truck. Barney and the others try to recover it through a parade as the egg narrowly avoids being stomped or cracked by the parade's participants as the egg's five colors begin to reveal itself, one color at a time. Barney's friend B.J. catches it when it almost lands on the ground, but accidentally tosses it away. Barney and the gang chase the egg throughout a French restaurant, a circus, and fly through the sky on an airplane to continue their pursuit of the egg which is in a hot air balloon. All the while, Baby Bop is looking for her small, yellow blanket, and B.J. and Baby Bop arrive just in time to see the egg hatch.
After they return the egg to the barn, it finally hatches into a koala-like being named Twinken who shows everyone Abby's dream and then Barney's. Cody apologizes to Barney for being mean and admits that he thinks he's cool. Barney accepts his apology and tells Cody that he thinks he's cool too and the two share a hug. Twinken shows everyone a magical fireworks display which lands in Barney's arms. Barney begins to sing "I Love You", and everyone else sings with him. Baby Bop gets sleepy, which prompts B.J. to decide that they are ready to go home. The film ends with Twinken sitting right next to Barney, who has reverted to his doll form.
- Team Griffin/Eeveelution, The Griffin Family, Vinny Griffin, Glenn Quagmire, Cleveland Brown, Joe Swanson, Doug Funnie, Skeeter Valentine, Roger Smith, Bender Bending Rodríguez, Minerva Mink, Master Shake, Meatwad, Frylock, Pazu, Sheeta, The Crystal Prep Girls, Wubbzy, Widget, Walden, Daizy, Natsu Dragneel, Lucy Heartfilia, Gray Fullbuster, Erza Scarlet, Wendy Marvell, Happy, and Carla guest star in this film.
- Barney - The Song (sung by Bernadette Peters)
- Let Me Call You Sweetheart
- Twinkle Twinkle Little Star
- Old MacDonald Had a Farm
- If You're Happy and You Know It
- Who's Inside It?
- If All the Raindrops
- We're Gonna Find a Way
- I Love You
- Twinken's Tune (for the end credits)