A plane descends to an airport hidden within the Avatar Mountains in Hunan province China. It delivers a clever 10-year-old girl named Kathy accompanied by her parents and a precocious white cat named Puff. They are visiting their friends, the Zhangs, on the evening celebration of the Chinese Lunar New Year. Amidst the commotion Puff collides into a mischievous monkey who advises him to run away; that the end of time has come. Frightened by all the celebratory fireworks, Puff retreats to the forest where his adventure begins.
After narrowly escaping an alligator ambush, Puff meets Junglow: an overweight yet wise and gentle red panda. Junglow helps Puff dodge a shrewd clouded leopard named Yin Shen by climbing up a steep cliff from which Puff falls into Jade Lake. He is rescued by a silent mystical Chinaman in a canoe named Lu Dongbin who transports Puff to the forest on the other side of the lake.
After saving Puff from a black cobra, Lu Dongbin disappears as Puff meets a female pangolin named Lanshye. She introduces him to her friends: the forest ambassadors, who seek to end the exotic animal trade in their forest. The ambassadors include Lanshye, Dhonglee the hog-badger, Towgwo the raccoon dog, and Hershan the amber pheasant who hide with the sound of poachers coming.
Kathy announces Puff is gone as her father and Mr. Yang set off to find him. The mischievous monkey, Tigwee, observes Mr. Zhang's disgrace and rushes to the jungle to right his wrong. After an acrobatic chase with Yin Shen, Tigwee joins Junglow who informs him where to find Puff.
Puff joins the arrogant Towgwo while Lanshye and Dhonglee are captured by poachers. To save their friends, Puff and Towgwo climb a tall nearly vertical cliff while bombarded by flying squirrels protecting their mountain. Forced down endless terraced rice fields to the great Wall of China, they unexpectedly confront an old South China Tiger named Guwang who Puff cunningly outwits.
The game warden, Liling, volunteers to track Puff while at the same time searching for her precious pet, Towgwo, wearing an Imperial Jade necklace intended to finance anti-poaching efforts. She fastened it on his neck and sent him away the week prior just before the evil tracker, Li Qiang, attempted to steal it.
After Puff and Towgwo rescue Lanshye and Dhonglee they arrive at the game warden's field house where Towgwo was told to wait. Afterward Liling and Mr. Taylor arrive just as Li Qiang appears demanding the necklace. During the confusion Puff grabs the necklace and runs to the forest to hide as countless obstacles block his way home.