Dorothy is a young girl who lives with her Aunt Em, Uncle Henry, and dog, Toto, on a farm on the Kansas prairie. One day, she and Toto are caught up in a cyclone that deposits them and the farmhouse into Munchkin Country in the magical Land of Oz. The falling house has killed the Wicked Witch of the East, the evil ruler of the Munchkins. The Good Witch of the North arrives with three grateful Munchkins and gives Dorothy the magical silver shoes that once belonged to the Wicked Witch. The Good Witch tells Dorothy that the only way she can return home is to follow the yellow brick road to the Emerald City and ask the great and powerful Wizard of Oz to help her. As Dorothy embarks on her journey, the Good Witch of the North kisses her on the forehead, giving her magical protection from harm.
On her way down the yellow brick road, Dorothy attends a banquet held by a Munchkin named Boq. The next day, she frees a Scarecrow from the pole on which he is hanging, applies oil from a can to the rusted joints of a Tin Woodman, and meets a Cowardly Lion. The Scarecrow wants a brain, the Tin Woodman wants a heart, and the Cowardly Lion wants courage, so Dorothy encourages them to journey with her and Toto to the Emerald City to ask for help from the Wizard. After several adventures, the travelers arrive at the Emerald City and meet the Guardian of the Gates, who asks them to wear green tinted spectacles to keep their eyes from being blinded by the city's brilliance. Each one is called to see the Wizard. He appears to Dorothy as a giant head, to the Scarecrow as a lovely lady, to the Tin Woodman as a terrible beast, and to the Cowardly Lion as a ball of fire. He agrees to help them all if they kill the Wicked Witch of the West, who rules over Winkie Country. The Guardian warns them that no one has ever managed to defeat the witch.
The Wicked Witch of the West sees the travelers approaching with her one telescopic eye. She sends a pack of wolves to tear them to pieces, but the Tin Woodman kills them with his axe. She sends wild crows to peck their eyes out, but the Scarecrow kills them by breaking their necks. She summons a swarm of black bees to sting them, but they are killed while trying to sting the Tin Woodman while the Scarecrow's straw hides the others. She sends a dozen of her Winkie slaves to attack them, but the Cowardly Lion stands firm to repel them. Finally, she uses the power of her Golden Cap to send the Winged Monkeys to capture Dorothy, Toto, and the Cowardly Lion, unstuff the Scarecrow, and dent the Tin Woodman. Dorothy is forced to become the witch's personal slave, while the witch schemes to steal her silver shoes.
The witch successfully tricks Dorothy out of one of her silver shoes. Angered, she throws a bucket of water at the witch and is shocked to see her melt away. The Winkies rejoice at being freed from her tyranny and help restuff the Scarecrow and mend the Tin Woodman. They ask the Tin Woodman to become their ruler, which he agrees to do after helping Dorothy return to Kansas. Dorothy finds the witch's Golden Cap and summons the Winged Monkeys to carry her and her friends back to the Emerald City. The King of the Winged Monkeys tells how he and his band are bound by an enchantment to the cap by the sorceress Gayelette from the North, and that Dorothy may use it to summon them two more times.
When Dorothy and her friends meet the Wizard of Oz again, Toto tips over a screen in a corner of the throne room that reveals the Wizard. He sadly explains he is a humbug—an ordinary old man who, by a hot air balloon, came to Oz long ago from Omaha. He provides the Scarecrow with a head full of bran, pins, and needles ("a lot of bran-new brains"), the Tin Woodman with a silk heart stuffed with sawdust, and the Cowardly Lion a potion of "courage". Their faith in his power gives these items a focus for their desires. He decides to take Dorothy and Toto home and then go back to Omaha in his balloon. At the send-off, he appoints the Scarecrow to rule in his stead, which he agrees to do after helping Dorothy return to Kansas. Toto chases a kitten in the crowd and Dorothy goes after him, but the ropes holding the balloon break and the Wizard floats away.
Dorothy summons the Winged Monkeys and tells them to carry her and Toto home, but they explain they can't cross the desert surrounding Oz. The Soldier with the Green Whiskers informs Dorothy that Glinda, the Good Witch of the South may be able to help her return home, so the travelers begin their journey to see Glinda's castle in Quadling Country. On the way, the Lion kills a giant spider who is terrorizing the animals in a forest. They ask him to become their king, which he agrees to do after helping Dorothy return to Kansas. Dorothy summons the Winged Monkeys a third time to fly them over a hill to Glinda's castle. Glinda greets them and reveals that Dorothy's silver shoes can take her anywhere she wishes to go. She embraces her friends, all of whom will be returned to their new kingdoms through Glinda's three uses of the Golden Cap: the Scarecrow to the Emerald City, the Tin Woodman to Winkie Country, and the Lion to the forest; after which the cap will be given to the King of the Winged Monkeys, freeing him and his band. Dorothy takes Toto in her arms, knocks her heels together three times, and wishes to return home. Instantly, she begins whirling through the air and rolling on the grass of the Kansas prairie, up to the farmhouse. She runs to Aunt Em, saying "I'm so glad to be home again!"