One Christmas Eve, a long time ago, a small baby at an orphanage crawled into Santa's bag of toys, only to go undetected and accidentally carried back to Santa’s workshop in the North Pole. Though he was quickly taken under the wing of a surrogate father and raised to be an elf, as he grows to be three sizes larger than everyone else, it becomes clear that Buddy (Will Ferrell) will never truly fit into the elf world. What he needs is to find his real family. This holiday season, Buddy decides to find his true place in the world and sets off for New York City to track down his roots. Although Buddy experiences a world he never knew existed, he quickly learns that life in the big city is not all ice skating and sugarplums, and he finds himself as much an outsider there as back in the North Pole. Buddy seeks out his real father, Walter (James Caan), a workaholic publisher of children’s books with a place on Santa's "naughty" list. Walter doesn’t believe Buddy is who or what he says he is; in fact, the only thing Walter believes in with any certainty is the bottom line. Buddy also discovers a new mom (Mary Steenburgen), and learns he has a ten-year-old half-brother (Daniel Tay) who doesn’t believe in Christmas or elves or Santa. In fact, everyone seems to have forgotten the true meaning of Christmas. With the holiday season fast approaching, Buddy takes it upon himself and his earnest elf ways to win over his family, realize his destiny and, ultimately, save Christmas for New York and the world.