R2-D2 and C-3PO meet five household appliances --Toaster, Lampy, Radio, Blanky, and Kirby -- who live in an empty cabin located in the countryside. Each day they await their "Master", a child whom they have not seen for many years, with a growing sense of abandonment. When a car stops at the cabin and turns out to be a real estate broker placing a "for sale" sign, the appliances spiral into despair. Unable to accept that the Master would abandon them, Toaster decides that the group should head out and find the Master. The appliances rig up a car battery to an office chair pulled by Kirby and set out into the world, following the Radio's signal broadcasted from the city, where the Master lives.
From the cabin to the big city, the droids and the appliances have many harrowing adventures where they slowly learn to work together. Shortly after stopping to rest within a forest, a violent storm during nightfall wakes Toaster and the others and blows Blanky up into the trees, and Lampy risks his life by using himself as a lightning rood to recharge the group's dead battery. After recovering Blanky, the group tries to cross a waterfall, only to have everyone fall in except for Kirby and R2. The astrodroid and the vacuum dive after them and rescue them, and the droids and the appliances wash up into the middle of a swamp. Having lost the office chair and battery, the group resorts to pulling the disabled Kirby through the swamp. After almost drowning in quicksand, they are rescued by Elmo St. Peters, the owner of an appliance parts store, who was quickly lead to the area by a worried C-3PO and a determined R2-D2. At the store they meet a group of partially dismantled or broken appliances, who have given up on hope and await being disassembled and sold. After Radio is taken from the shelf and is about to have his radio tubes extracted, the appliances trick St. Peters and R2 and C-3PO knock him out cold, allowing them all to escape and head into the city.
The Master, whose name is revealed to be Rob, lives in an apartment as a young adult and is about to depart for college. The Master leaves with his girlfriend Chris to head back to the cabin to pick up the appliances to take with him. The modern electronics in the apartment become disheartened and jealous. When the droids and the appliances arrive at Rob's apartment, the modern appliances convince them that they are outdated and unusable, tossing them into the garbage, where they are shortly transported to Ernie's Disposal, a junkyard. Rob and Chris return home after believing his original appliances were stolen. Rob's black and white television, who originally lived with the appliances, broadcasts fake advertisements and convinces Rob and Chris to look at Ernie's Disposal for replacements.
At the junkyard, despite protests from the droids, the appliances lose hope and put themselves at the mercy of a giant magnetic crane that picks up junk and places it on a conveyor belt that leads into a car crusher. When they discover that Rob is in the junkyard, they are encouraged and attempt to foil the magnetic crane in order to allow Rob to find them. After being thwarted several times, the evil magnetic crane picks up Rob himself as well as all of the appliances, except for Toaster and the droids, and drops them on the compactor's conveyor belt. In a climactic act of self-sacrifice, R2-D2 and Toaster leap into the compactor's drive gears and stop the machine from destroying all of the appliances and Rob.
After watching his loyal companion become mangled up in rusted gears, C-3PO hears the familiar voices of Benny the Beast, Leo Lionheart, Johnny the Lion and Rae the Lioness, all who had been looking for them the entire time. Accompannied by the LionKingHeart Fantasy Filmes leaders and their droids, Rob returns to the apartment with all of the appliances in tow, including the now mangled Toaster. Benny repairs R2 before everyone decides to head back to the studio, and Rob repairs the Toaster and takes all of them to college with him.
- The Brave Little Toaster premiered in 1987, ten years after the original Star Wars (A New Hope) was released to theaters.
- Benny, Leo, Johnny and Rae appear as cameos at the very end of this adventure.
- The direct-to-video sequel to the Brave Little Toaster (The Brave Little Toaster to the Rescue) and the first Star Wars prequel (The Phantom Menace) were both released in 1999.
- The appliances might see the droids again, as well as the other Fantasy Team members, sometime in a future adventure.