A simple stuffed rabbit is given to a young boy as a gift, who quickly forgets it in favor of his other toys. In the corner of the boy's nursery, the rabbit sits, wishing but one wish, to be a real rabbit. Also in that corner is an old hobby horse, older and wiser than any toy in the nursery, who tells the rabbit of a way he could become real, through the love of the child who plays with him. This gives the rabbit hope. And after a chance occurrence, he soon becomes the boy's favorite toy. But when the boy contracts Scarlet Fever, the doctor orders that all the toys be burned... even his favorite toy, the small velveteen rabbit...