Sixteen-year-old Wendy Darling's life is not what she imagined it would be. The doldrums of an empty house after her brothers have gone to school, the dull parties where everyone thinks she talks too much, and the fact that her parents have decided to send her away to Ireland as a governess-it all makes her wish things could be different.
Wendy's only real escape is in writing down tales of Never Land. After nearly meeting her hero, Peter Pan, four years earlier, she still holds on to the childhood hope that his magical home truly exists. She also holds on to his shadow.
So when an opportunity to travel to Never Land via pirate ship presents itself, Wendy makes a deal with the devil. But Never Land isn't quite the place she imagined it would be. Unexpected dangers and strange foes pop up at every turn, and a little pixie named Tinker Bell seems less than willing to help.
But when Captain Hook reveals some rather permanent and evil plans for Never Land, it's up to the two of them to save Peter Pan-and his world.
Four years prior, while listening in on Wendy's stories about himself, Peter Pan had his shadow taken when he startled the Darlings' dog, Nana. However, as Tinkerbell had assured him that his shadow was not in London, Peter Pan never returned. Meanwhile, Wendy, feeling rejected by Peter and growing tired of her mundane life, dreams about Captain Hook, seeking comfort +from him and sobbing, while telling Hook that she still had Peter Pan's shadow.
Hoping to distract Wendy from her stories with a project, her parents provide Wendy with a teacup terrier, who she names Snowball, in order to keep up with current trends. This earns Wendy an invitation to one of Clara and Phoebe Shesbow's literary salon-esque teas, the twins enamored with Snowball and voicing their past concerns that Wendy would become a lonely spinster.
Wendy returns home to discover that her parents had discovered her journal containing all of her stories and are disappointed in her obsession with Neverland. Wendy is informed that she is to be sent to Ireland to live with the cousin of a family friend, caring for their five children. Horrified by this news, and deciding that Peter Pan must not value his shadow any longer, Wendy packs the necessary items and meets with Hook to offer an exchange: Peter Pan's shadow for safe passage to and from Neverland. While Hook obliges, the pirates initially reject Wendy, that is, until she offers to patch a pair of pants for one of the crewmembers. Wendy's sewing skills attract the attention of the other pirates, during which time she learns that Hook is still terrified of Tick-Tock, the crocodile that had pursued him after Peter Pan fed Hook's left hand to it; although it hadn't been seen for years and was assumed to be dead. Wendy also meets the pirate Alodon Zane, who she shares a connection with, but their meeting is cut short by an invitation to dine with the captain.
At dinner, Wendy suspects Hook of planning something, however he refuses to reveal anything to Wendy, due to viewing her more as a bystander, intending to put Pan and Neverland behind him once and for all. Afterwards, a pirate named Valentine attempts to force himself on Wendy, and Hook dispatches him, reprimanding the crew for their poor behaviour toward their intended "mother", Wendy, revealing why Hook had bartered with Wendy and that he had no intention of bringing her ashore. Elsewhere, in London, Tinkerbell seeks out Wendy - only to learn from Nana that Wendy had sought out the pirates in order to venture to Neverland.
A distraught Wendy is approached by Zane, who offers to help get her off of the Jolly Roger, claiming that he was stuck in the role of a pirate, but that Wendy wasn't - supplying her with a dingy at dawn. After a long struggle, Wendy reaches the beach, where she wonders about what had become of Neverland versus what she'd dreamed, harkening back to what Zane had said about his role. Wendy's shadow then chastises her for selling Peter's shadow, leading Wendy to accept that she would have to deal with the consequences of her actions when the time comes. Wendy discovers her imagined home, where her wolf pup, Luna, dwells. Realizing that Neverland seems to know her better than she knows herself, Wendy sets out to find Peter, only to be attacked by a creature Michael had created, called Puppin.
With aid from Luna, Wendy manages to destroy Puppin and is found by Tinkerbell shortly thereafter. Tinkerbell struggles to inform Wendy of her intentions, demanding to know what she'd done with Peter's shadow. Horrified by the truth, Tinkerbell viciously attacks Wendy, leading Wendy to attempt to explain the circumstances of her decision, and owning up to her mistake. Wanting to atone for her actions, Wendy asks where they can find Peter Pan, however Tinkerbell is unsure, herself - prompting Wendy to suggest that they seek out the Lot Boys together.
Back aboard the Jolly Roger, Captain Hook reasons that Peter Pan and his shadow are connected somehow, Hook attempts to torture the shadow, to limited success. When all seems hopeless, Smee insights an idea in Hook by jokingly comparing the connection Pan shares with the shadow to a compass pointing north, encouraging Hook to seek out Madam Moreia.
After teaching Wendy how to fly, the two arrive at the Hangman's Tree, where Wendy meet Slightly, Cubby, Skipper, The Twins, and Tootles. Tinkerbell explains to the Lost Boys what had happened, but this reveals to Wendy that Tinkerbell herself had been responsible for Peter not returning to London to look for his shadow, as she'd been jealous of Peter's interest in Wendy. The Lost Boys admit that none of them had really spoken to Peter very much since he'd lost his shadow, as Peter had threatened to cast out Slightly because of the fact that the de facto leader of the Lost Boys was growing up; Slightly having grown tired of the monotony of his life. Unsure of where to start, Cubby suggests that Wendy try Mermaid Lagoon, as he often went there when he was feeling down, but Wendy would have to go alone, wanting to see how Peter reacted to everything Wendy and Tinkerbell had done before they approach him themselves. Before they go, Wendy discovers that Skipper is actually a girl, who reasons that Peter would not have taken her from the orphanage if she'd not disguised herself; something Peter doesn't know.
Venturing to Mermaid Lagoon, Wendy addresses the creatures, who attempt to lure Wendy into the water. When Wendy agrees to meet them at the shore, privy to their murderous intent, they trip her with a vine and Wendy is cast into the water and the mermaids attempt to drown her. While Wendy struggles, Tinkerbell lights off toward the jungle, bringing back a fruit that she tosses into the lagoon, distracting the mermaids - who covet fruit - long enough for Wendy to escape. Wendy then reveals the purpose of their mission to the mermaids, who reveal that Peter had left them four days prior to seek out and petition The First, who were powerful god-like beings that presided over Neverland.
Back with Captain Hook within Madam Moreia's domains, the witch suggests to Hook that he needed something more human-sized than a compass for a shadow, like a penopticon. Offering her spell books, Madam Moreia is willing to aid the pirates in exchange for payment in the form of goods from Hook's ship.
Wendy and Tinkerbell begin to bond over their shared reasoning for longing after Peter Pan. This act of comradery leads Tinkerbell to provide Wendy a taste of Pixie Dust, which allows the girl to understand the likes of Fairies. Tinkerbell then explains that, in order to find The First, she'd have to contact others of her kind, asking that Wendy hide, whilst she performs "The Call". Another Fairy, named Berryloon, answers The Call for Tinkerbell, but berates her for not participating in the Fairy community. Asking for help, Tinkerbell and Berryloon are joined by a male Fairy, named Thorn, who voices that the Fairies have no interest in helping Tinkerbell in regard to Peter Pan, believing instead that Tinkerbell should rejoin Fairy society - relenting only after learning of Captain Hook's intent to destroy all of Neverland, directing Tinkerbell to the Chanting Peninsula, the last known whereabouts of the Land of The First.
Once the other Fairies have left, Tinkerbell is attacked by a Qqrimal, a weasel-like predator of Fairies. Despite Wendy's attempts to free Tinkerbell from the beast, it slinks out of her grip, escaping with Tinkerbell. Wendy then releases her shadow, which uses itself to bind the Qqrimal, allowing Wendy to rescue her Fairy friend. However, afterwards, Wendy's shadow escapes, only for Wendy to learn that she cannot return to London without her shadow - Peter Pan only being able to do so because he was almost a Pixie himself. Exhausted, Wendy sleeps on the way to the Chanting Peninsula Land, guarded by Tinkerbell.
Entering the Land of the First, the two encounter differing visions of the world before them. The First confront Wendy and Tinkerbell soon thereafter, and upon hearing their mission, procclaim that the affairs of Peter Pan do not concern them, thus they'd sent him away. The First demand to know why Wendy is in Neverland, believing that humanity is the cause for the categorization of their world, causing it to crystallize to the point of permanence. This was because of human dreams, as children's dreams - being the most potet, rule over everywhere - except for the Land of the First. Elaborating, The First attest to other children's dreams being horrible and twisted because of differing situations that force them into poverty or abuse, admitting that they could do nothing about Hook's plans to destroy Neverland because he was the byproduct of the human world, which mirrors Neverland - ultimately suggesting that Wendy should do something to save her own world and Neverland would follow. The First then disappear, leaving Wendy and Tinkerbell trapped within the Land of The First and cut off from Neverland.
The two begin making their way toward a set of mountains in the distance, discovering along the way that Wendy likes Thorn, whilst Tinkerbell only has eyes for Peter Pan. As they follow along what seems to be a riverbed, Wendy reasons that they're being led upon a path that goes nowhere, and wonders if she's being tested by The First. Together, Wendy and Tinkerbell consider that Wendy's dreams seem to affect Neverland, thus potentially meaning that they could be used to help them out of their present situation.
Despite her first attempt failing, Wendy is encouraged by Tinkerbell and crafts a story about the river that had once existed where they stood, explaining that a warlord had fallen in love with a princess, though it had been unrequited, as the princess' heart belonged to a farmer across the river. In response the warlord tied the river in a knot and dried up the surrounding environment, cutting off the princess from the farmer. Their tears managed to eventually refill the river, overflowing it and undoing the knot, thus allowing the two to reunite and build a home together on one of the emerging islands. Just as Wendy had detailed, the river reappears, and she and Tinkerbell take the princess' boat and dagger, while Wendy also crafts a clockwork crocodile, originally intended to aid in reuniting the princess and the farmer, which had been freed from its task in order to help others down river - as Wendy believed that it could be used as a tool against Hook. Upon sailing back into Neverland, Wendy and Tinkerbell are caught in the rain and take shelter in a Trufaluff tree, with Wendy extending an invitation for Tinkerbell to visit her in London, with or without Peter Pan, where she would set up a small home for the fairy.
Hook fastens an intricate pointed cage of golden wire to the front of the Jolly Roger, with Peter Pan's shadow stuck onto the points, while the wires connected to the captain's wheel to guide the Jolly Roger based on the tortured movements of the shadow. Zane approaches Hook, asking when the charade would finally come to an end, as the crew stands opposed to Hook's use of black magic - suggesting that his obsession with Peter Pan was symbolic of chasing his own youth. Though furious, Hook allows the crew a break from their endeavors, as he had an errand to take care of at Skull Rock.
Wendy and Tinkerbell are roused from their shelter by a group of Thysolits, insects which draw in victims by projecting looped images of their memories on their backs. The two browse the Thysolits in order to figure out where the pirates were, and, upon discovering what Hook had done with Peter Pan's shadow, a sense of urgency overcomes the two. However, Wendy is drawn in by the images of her home back in London, forcing Tinkerbell to chase after her as she is flown away by the Thysolits. Tinkerbell bites Wendy in order to snap her out of her daze, but when they try to escape the swarm, the Thysolits prove to be relentless.
Back in London, the Darlings notice Wendy's absence and notify the police, though their attempts to find their daughter turn up nothing. Mr. and Mrs. Darling realize that Wendy must have run away because they'd taken her story book and intended to send her to Ireland, much to John and Michael's horror. Wendy's younger brothers then discover that Peter Pan's shadow is missing, reasoning that she must have gone to Neverland.
After having escaped the Thysolits, Wendy and Tinkerbell continue down river until they spot Peter Pan, and make their way ashore, where Wendy reunites with her own shadow. Tinkerbell informs Peter that Wendy was going to help him find his shadow, but as Peter complains about vague pains and exhaustion, Wendy and Tinkerbell realize the correlation between this and Peter's shadow's own precarious situation. Together, the two reveal what had happened to Peter, who is furious with Tinkerbell for keeping the location of his shadow from him, banishing her. Pan redacts his decision, however, after Wendy stands up for Tinkerbell, and explains Hook's own machinations. Peter is delighted for the opportunity to fight with Captain Hook again, marvelling at Wendy's actions, but when Tinkerbell attempts to deny Peter any fairy dust due to the way he'd been more or less ignoring Wendy, Wendy reasons that they'd actually be better off waiting for the pirates to come to them.