The film opens on a golden summer day in the park. Alice (whom Thomas, Twilight Sparkle and their friends are hanging out with and they all are her special friends) is listening to her sister read aloud from a history book, to which Alice vocally expresses her boredom. Wandering off without her sister noticing, Alice lays down on a riverbank, wishing that she had a world of her own ("A World of My Own", as she explains and sings to her little kitten Dinah, Thomas, Twilight and the others). Suddenly Alice and our heroes see a white rabbit wearing spectacles, a red waistcoat and carrying a large, golden pocket watch. He frantically exclaims how late he is, which sparks Alice's curiosity and causes her, Thomas, Twilight and their friends to follow him down a rabbit hole. As Alice, Thomas, Twilight and the others crawl deep inside, the rabbit hole dips suddenly down, causing them all to fall into it.
Unable to do anything about the situation she was in, Alice slows down her fall and something mysterious slows down everyone else's fall. Amazed at what just happened, Alice, Thomas, Twilight and the others continue to float down the rabbit hole wondering what would happen to them. Without anything else to do, Alice decides to admire the decorations and knick knacks adorning the walls of the rabbit hole and our heroes stating that they never seen the inside of a rabbit hole before. Alice, Thomas, Twilight and the others land with a hard thud and follow the rabbit into a large hallway with a tiny door at the other end barely big enough for Alice's head and Thomas, Twilight and the others's huge sizes. The Doorknob tells them that drinking from a bottle marked "Drink me" will help them (as Alice drinks the "Drink Me" bottle, Thomas, Twilight and the others all shrink along with her, but they did not taste the food and stay the way they are right now). Alice drinks the bottle's contents and starts shrinking until she and the others become the right size, but the Doorknob reveals that he's locked. Frustrated, Alice is told by the Doorknob that a cookie marked "Eat me" will help her reach the key that's mysteriously appeared on the now giant glass table (the box of cookies also has materialized out of nowhere). When Rainbow Dash, Fluttershy, Heckle and Jeckle all say that we will get the key up high from the table, they all tried flying up there, but when that happened, something strange and mysterious stopped them from flying and they all stayed on the ground throughout this movie. This time when Alice starts eating the cookie, she suddenly grows so large that her head and legs are cramped in the hallway.
Alice begins to cry hysterically, her massive tears flooding the room and almost drowning everyone. Thomas and Twilight tried to tell Alice to calm down and that they all will help her if she stops crying, but no success. The Doorknob points out that the "Drink me" bottle still has some fluid inside, so Alice sips some the best she can at her height. Alice suddenly shrinks and becomes so small that she fits inside the bottle. She, Thomas, Twilight, the others and the bottle travel through the doorknob's keyhole mouth and out to a sea made from Alice's tears. A group of animals, led by a dodo, engage in a caucus race in order to get dry. Alice, Thomas, Twilight and the others spot the White Rabbit and follow him into a secluded glade in the middle of a thick forest. It is here that they meet Tweedle Dee and Tweedle Dum, two fat brothers who take particular delight in reciting poems and songs. After Tweddle Dee and Tweddle Dum want to know what are everyone's names and what are they doing, they perform a poem for Alice and our heroes called "The Walrus and the Carpenter," which tells of the two titular characters luring some oysters to their lair and subsequently eating them all. Everyone sneak away as they attempt to recite another poem for them, and they come upon the White Rabbit's house, with its owner inside.
Before Alice has a chance to ask him why he is so frantically late, he berates her, thinking her to be his housemaid, Mary Ann, and orders her to fetch his gloves from his bedroom. Thomas, Twilight and the others all decided to go inside the house to help Alice find the gloves. Inside, Alice decides to eat another cookie, resulting her into growing so large that she gets stuck inside the house, her arms and legs sticking out of the windows and Thomas, Twilight and the others all ended up stuck inside the house upstairs, their wheels and legs being stuck by Alice's large body. The White Rabbit pleas for the help of the Dodo to get her out, thinking her to be some sort of ferocious monster. The Dodo summons a chimney sweep lizard named Bill to rip the house's chimney off. Bill's scampering down the chimney causes soot to rise and Alice to sneeze, shooting Bill up towards the sky. The Dodo then attempts to burn the house down using some of the White Rabbit's broken furniture, much to his dismay. Alice frantically looks for a solution to her dilemma, and finds one in the form of a carrot in the White Rabbit's garden. After eating, Alice shrinks down to three inches in size. Twilight uses a special shrinking spell on herself and everyone else to shrink to the size as Alice's small size, despite that she reveals that she doesn't know a growing-back-to-normal spell at all. The Rabbit runs off again, this time into a garden of flowers. Because of everyone's size, the flowers are as tall as trees to them. Initially they're eager to entertain them, but when they reveal that they're not flowers, they suspect that they may be weeds and throw them out in a panic.
Everyone get over their annoyance at their rudeness quickly when they see a blue caterpillar blowing smoke rings in the air. Each ring takes the form of a letter or symbol that the Caterpillar is saying. Despite their best efforts to ask him how to grow tall again, the Caterpillar continually interrupts them, commanding them to recite various bizarre poems. He grows angry at their displeasure of being the same height as him, and turns into a butterfly in a rage, though not before giving her cryptic advice about the mushroom Alice is sitting on (One side will make her and everyone else grow taller and the other side will them grow shorter when Alice takes a bite of either side). Alice breaks off two pieces from either side of the mushroom. She and Rainbow Dash all take a bite of the first piece which causes them to grow so tall that their heads stick out of the trees and Alice alarms a nesting mother bird that thinks she is a serpent. She and Rainbow Dash then take a bite of the second piece and shrink back down to three inches high. With a small lick of the first piece, Alice finally grows back to her normal size along with Thomas, Twilight and the others and Alice decides to put both mushroom pieces into her pockets while our heroes decide to put their pieces of their own mushroom in somewhere.
Wandering through the woods, they meet the Cheshire Cat, an eerily grinning feline that can disappear and reappear at will. Alice, Thomas, Twilight and the others try their best to ask him where the White Rabbit has gone to, but their attempts are futile as he speaks vaguely and in riddles. He finally points them in the direction of the March Hare's house. It is here that Alice and our heroes see a long tea table set up outside with the March Hare himself accompanied by a Mad Hatter and a Dormouse. They find out that they are celebrating their unbirthdays, which is a day of the year when it is not one's birthday and soon they celebrate Thomas, Twilight and the others' unbirthday. When the White Rabbit shows up, the Hatter and Hare attempt to fix his pocket watch, but end up destroying it in the process. After they've literally thrown him out of the tea table, everyone try to run after him but find that he has disappeared again.
Soon Alice, Thomas, Twilight and the others give up trying to track the White Rabbit down, and decide to spend their time trying to get back home. They find themselves more and more lost in a forest called Tulgey Wood, which is filled with bizarre creatures that either snap at them or pay no attention to them at all. Alice breaks down crying while Thomas, Twilight and the others all feel so very sad and some of them cried too at the thought that they will never see home again, and finds the Cheshire Cat again. He opens a door in a tree that leads to a seemingly neverending hedge maze, telling Alice and our heroes that the Queen of Hearts could possibly help them.
They meet some giant playing cards who are painting white roses red since the Queen only prefers red and will behead them if she discovers their mistake. Alice and our heroes try to help them, but the White Rabbit appears and heralds the arrival of the Queen, her significantly shorter husband, and her massive pack of cards army. The Queen has a ferocious temper and is prone to having anyone beheaded at a moment's notice, to which she applies to the card painters who unsuccessfully painted the white roses. Randomly switching between bipolar moods, she invites Alice to play a game of croquet with her, using flamingos as mallets, hedgehogs as balls, and card soldiers as goals. Thomas, Twilight and the others watched and they are not pleased at this version of croquet and they hoped Alice will win. The Queen actively cheats during the game, and beheads anyone who dares stand in the way of her victory. The Cheshire Cat appears and attaches the beak of the Queen's flamingo mallet to the bottom of her dress, resulting in her toppling over and revealing her underwear. The Cat disappears in time to make it look like Alice was the prankster, but before the Queen can order her execution, the King suggests they have a trial.
The Dormouse, the March Hare, and the Mad Hatter all come forth as witnesses that add nothing whatsoever to the trial at hand. When the subject of unbirthdays arise, everyone (except Alice, Thomas, Twilight and the others) in the courtroom celebrates the Queen's. Thanks to some more mischief by the Cheshire Cat, pandemonium ensues. Alice suddenly remembers that the mushrooms were still in her pocket and shoves both pieces into her mouth, growing to gigantic proportions. At this size, Alice scolds the Queen for her rash behavior, but then starts shrinking back to her normal size all too soon.
The Queen orders for her guards to execute Alice, which results in a frantic chase through Wonderland, chasing Alice, Thomas, Twilight and the others. Various characters Alice, Thomas, Twilight and the others met on their journey appear and inexplicably join the Queen and her guards in their pursuit. Coming back to the Doorknob, Alice and Thomas, Twilight and the others are told by him that he's still locked, and that they are already on the other side. Looking through the keyhole, Alice sees herself asleep in the park. Also, Thomas, Twilight and the others see themselves all asleep in the park. Everyone urgently bang on the door and they call to themselves to the other side to wake up as the mob draws closer, until they all gradually awaken to the sound of her sister's voice. Thomas, Twilight and the others are very confused with the question of "do we experience all this or is it all a dream". They think about how can they all have the same dream at the same time. Rainbow Dash, Fluttershy, Heckle and Jeckle are asked if they can still fly and the four of them replied that they can still fly. Alice's sister asks everyone what are they talking about and Thomas and Twilight reply that it's a long story. The film ends with Alice, her sister and all our heroes return home for teatime.
- This movie takes place before Winnie the Pooh and the Care Bear's Adventures in Wonderland.
- Alice, her sister and their mentioned mother are revealed to be relatives of The Fat Controller.
- This movie is inspired by Pooh's Adventures of Alice in Wonderland, Yogi Bear's Adventures with Alice in Wonderland and The Berenstain Bears' Adventures with Alice in Wonderland together.