A stork delivers a parade of baby animals to a traveling circus, but Mrs. Jumbo, one of the elephants, receives her package at the end of the line. Her baby elephant has enormous ears, causing him to become the subject of ridicule and earning him the nickname "Dumbo." Mrs. Jumbo tries to protect her son, but after an incident defending him from a group of teasing children, she is deemed mad and locked away, leaving Dumbo isolated and ostracized by the other elephants and circus folk. The only friend he makes is Timothy Q. Mouse, who becomes determined to help Dumbo regain his mother's freedom and find his place in the world.

Timothy convinces the circus ringmaster to make Dumbo the top of an elephant pyramid stunt, aiming to turn his ears into an asset. However, during the performance, Dumbo trips on his ears and brings the pyramid crashing down, humiliating himself even further. As a result, Dumbo is demoted to a clown act, where he is forced to jump from a burning building into a vat of pie filling. Despite the crowd's laughter and enjoyment, Dumbo is miserable in his new role, feeling more alienated and longing for the warmth of his mother.