8-year-old Jessica Riggs is raised by her older brother, Steve, and widowed father, John. Their apple farm has fallen on hard times. John is temporarily being helped by his sister-in-law, Sarah. While walking home after a school Christmas pageant, Jessica witnesses a plastic reindeer fall from a Christmas decoration being hung above the main street in town. She concludes that it was Prancer from the order given in the poem "A Visit from St. Nicholas" (a.k.a. "The Night Before Christmas"). Afraid he will be unable to provide for Jessica, John discusses a plan for Sarah to take her in to raise temporarily. She overhears this, but initially does not know the full details. She and her best friend, Carol, go sledding and knock down some flowers at a house owned by a reclusive widow, Mrs. McFarland. While walking home, Jessica encounters a live reindeer in the woods. It runs away, disappearing into the darkness. Later, while walking home from school, she finds reindeer tracks and follows them into the woods once more. She hears a gunshot, and continues to walk. John eventually finds her, but almost hits the reindeer who is now standing in the road. Noticing it is wounded, he grabs his rifle, intending to shoot it. As Jessica pleads for him not to do so, it disappears. Later while dreaming of Prancer, Jessica is startled awake by the scene of the plastic reindeer falling from earlier. She hears a noise and sees the window to the barn outside is open. Investigating, she finds the reindeer is now inside among the other animals. Afraid John will find him, she moves him to a shed. Certain that he is the "real" Prancer, she takes it upon herself to nurse him back to health. She calls a veterinarian who initially refuses, but comes over to find him. Jessica later tells a mall Santa that she has Prancer, and gives him a Polaroid picture along with a letter to give to the real Santa before Christmas Eve. He takes them to the editor of the local newspaper. Eventually, Jessica apologizes to Mrs. McFarland, and asks her if she can have a job to help pay for oats for the reindeer. Mrs. McFarland agrees to pay her if she cleans a room in the house, and they become friends. The newspaper editor, inspired by Jessica's faith, writes an article which is then read by the local pastor in the middle of his sermon, which makes Jessica find out that she has been outed to the entire town. She becomes mad at Carol, who she thinks squealed. She then terminates her friendship with Carol, and later finds the article in the paper. John, meanwhile, is reading the paper. Before he finds the article, he discovers Prancer has let all the other animals out of the barn. While he tries to round them up, Prancer goes inside the house and wrecks it. Townspeople begin to converge on the farm, wanting to see him. John grabs his rifle, threatening to shoot him when a local butcher stops him, offering to buy Prancer. Jessica, afraid the butcher will kill him, runs away in the night determined to rescue him. The butcher keeps him as a sales tool for his Christmas tree lot. Steve runs after her, telling her that he loves her even though they fight. She attempts to open Prancer's cage but falls, injuring her head. Jessica stays in her bedroom, becoming despondent. John goes to her and she asks him to read a passage from "Yes, Virginia, there is a Santa Claus". He tells her that times may continue to be hard for a long time but while he could bear losing the farm, he will not lose her. He changes his mind about sending her away. He suggests they take Prancer to Antler Ridge, which would be the perfect place for Santa to pick him up. The townspeople gather outside her window and begin singing to cheer her up. Prancer is taken to Antler Ridge where he runs out of sight. Following his tracks, John and Jessica notice that they vanish at the edge of a cliff. The faint sound of sleigh bells can be heard, and a streak of light is seen rising to meet Santa's sleigh. Jessica bids Prancer farewell, and to always remember her. The sleigh flies across the full moon and over the town towards the Riggs farm-its very first stop.