James Henry Trotter (whom Winnie the Pooh, Ash Ketchum, Simba, Littlefoot, Mickey Mouse, and their friends are hanging out with) finds himself living with his two abusive aunts, Spiker and Sponge, after his parents are "eaten by a demonic rhinoceros that appears out of nowhere." Life with his aunts is hard and he dreams of a better place, specifically New York City, a "dream like" place his parents had talked about. His dream comes true when a wounded Confederate soldier appears with a bagful of magic green "crocodile tongues," which look like twisty bugs, which are supposed to make his life better. When James and our heroes are returning to Sponge and Spiker's house, he trips and the "tongues" fall into the root of an old peach tree, affecting it and its inhabitants in amazing ways.
One peach is soon found on the tree, and it grows to immense proportions. James and our heroes venture into the giant fruit were they find and befriend a group of anthropomorphic invertebrate animals (who are all much larger than his small petite frame) who also dream of an ideal home (Mr. Old Green Grasshopper, Mr. Centipede, Mr. Earthworm, Miss Spider, Mrs. Ladybug, and Glowworm). Mr. Centipede manages to cut the twig holding the giant peach to the tree, and the peach rolls away to the Atlantic Ocean with James and his friends inside it.
They use Miss Spider's silk to tie a hundred seagulls to the peach stem, allowing them to fly their way to New York City while going through a series of adventures such as facing a giant robotic shark, skeletal pirates led by Jack Skellington's evil twin in an old frozen galleon, and the rhino which is riding with the clouds. The group finally gets to New York City, where James stands up to his aunts and learns to face his fears. The bugs are able to tie up Spiker and Sponge. The New York Police have crane-men to take them away, while thousands of children gobble up the peach. A while later, the peach stone is made into a house in Central Park, and James now has all the friends he wished for, a Family.