The spirit of winter Jack Frost is lifted with amnesia from the depths of a frozen pond by the Man in the Moon only to discover no one can see, hear, or touch him. Three hundred years later at the North Pole, North better known as Santa Claus, becomes aware that Pitch Black, the Boogeyman, has returned and is threatening the children of the world. After alerting fellow Guardians the Tooth Fairy (Tooth for short), the Easter Bunny, and the Sandman/Sandy of the problem, North learns that Jack Frost has been selected by the Man in the Moon as the newest Guardian. Jack Frost, frustrated and hurt by centuries of isolation, declines the invitation, but North persuades Jack Frost to cooperate by explaining their mission and the looming threat.
Meanwhile, Pitch Black and his Nightmare minions raid Tooth's palace, taking all the children's teeth and the memories stored within. He also captures Tooth's helper fairies except for a single fairy named Baby Tooth who is rescued by Jack Frost. Resentful that he himself is not believed in, Pitch plans to destroy children's faith in the Guardians and thereby weaken them by preventing Tooth from doing her work. To avert this, the Guardians travel the world collecting teeth, and promise Jack that when they find Pitch, they will help him regain his own baby teeth and through them the memories of his past life. On the expedition, a young boy named Jamie Bennett is delighted to discover the Guardians in his room. He believes in all of them except for Jack, whom he cannot see. Pitch learns of the Guardians' resistance and attacks Jack and Sandy. Despite Jack's efforts to save him, Sandy is overwhelmed and seemingly killed by Pitch.
The dejected Guardians rally by helping Bunnymund prepare his eggs for Easter. Although slightly complicated by the intrusion of Jamie's sister Sophie, the preparation goes smoothly. Jack takes Sophie home, but afterward a mysterious female voice lures him to Pitch's lair where Tooth's fairies and the teeth are being held. Pitch keeps him distracted with the promise of his teeth's memories, while Jack's absence allows the Nightmares to raid Bunnymund's domain, shattering all the eggs, and destroying the children's belief in the Easter Bunny.
After facing the disappointed Guardians, a despondent Jack departs in disgrace to Antarctica. There, Pitch tempts him to join forces, but Jack refuses, claiming that he wants to be loved, not feared. In retaliation for rejecting the offer, Pitch threatens to kill Baby Tooth unless Jack relinquishes the source of his power which is his staff. Pitch breaks the staff and throws Jack and Baby Tooth down into an ice crevasse out of anger, where Baby Tooth convinces Jack to unlock his memories in an attempt to counter his despair. Long ago, his memories teach him, he was a mortal teenage boy who died saving his little sister from falling through the ice of the pond in which he awakened at the film's start. Because of that sacrifice, the Man in the Moon changed him into a spirit and chose him as a Guardian. Inspired by the revelation, Jack restores his staff and returns to help the Guardians.
Due to the power of Pitch's Nightmares, only one child (Jamie) still believes. Jack races to the boy first and strengthens Jamie's wavering faith in the Guardians, but by creating snow in Jamie's room, he causes him to believe that Jack Frost is real. Jamie is finally able to see him much to Jack's delighted surprise. The weakened Guardians arrive to confront Pitch, while Jamie gathers his friends to support them. Pitch's powers prove no match against the children's faith, which allows the restored Guardians to battle Pitch. Sandy is resurrected by this belief and joins the fight, leaving Pitch defeated, the children's faith restored, and Jack with believers of his own. Upon seeing that he is no longer believed because of his defeat, Pitch attempts to escape, but his Nightmares track down his fear and drag him away into his lair.
At this victory, Jack accepts his place as the Guardian of Fun and resolves to protect the world's children with his new friends.