Bastian, a shy and bullied boy, finds comfort in books. One day, he discovers a mysterious book that transports him into the magical world of Fantasia, which is facing destruction from a force called The Nothing. Fantasia's ruler, the Childlike Empress, enlists the help of Atreyu, a brave young warrior, to find a way to save their world. As Bastian reads about Atreyu's journey, he becomes increasingly engrossed in the tale, realizing that his fate and Fantasia's are intertwined.

Atreyu embarks on a perilous quest, encountering myriad challenges and fantastical creatures, such as the wise centaur-like Morla, the luckdragon Falkor, and the malevolent wolf Gmork. He learns that only a human child can save Fantasia by giving the Empress a new name, prompting Bastian to confront his own fears and insecurities. Through a series of intense trials, Atreyu and Bastian both discover the power of imagination and belief.