In a small town, a group of children are delighted by the first snowfall of the season and decide to build a snowman, using a magical silk hat they find to complete their creation. To their astonishment, the snowman comes to life, introducing himself with a cheerful "Happy Birthday!" and revealing that his name is Frosty. His jovial nature is infectious, and he begins to frolic with the children, exploring the winter wonders around him. Frosty quickly becomes a beloved figure to the kids, embodying the joy and spirit of the winter season.

A greedy magician, who had discarded the hat that brought Frosty to life, realizes its magical properties and desires to reclaim it to restore his failing career. As the temperature begins to rise, Frosty's existence is threatened, and the children hatch a plan to transport him to the North Pole, where he can remain frozen and alive indefinitely. Joined by a young girl from the group, Frosty sets off on a journey to reach the cold sanctuary, chased by the magician who seeks to capture the hat and extinguish Frosty's magic forever. As they encounter challenges along the way, the story unfolds into a race against time and the elements, with friendship and perseverance at its core.