The plot involved a little girl named Marcella whose Raggedy Ann and Andy dolls would come to life when no humans were present in her bedroom. Then they would be whisked off to a parallel world to save its inhabitants from the villain, an evil but inept sorcerer known as Cracklin.

Also aiding Ann and Andy were two of Marcella's other stuffed animals, a panda with a faux-British accent known as Grouchy Bear and a stuffed rabbit known as Sunny Bunny. Sometimes they would be joined by more modern toys such as robots or toy soldiers. Often the plot involved the toys helping children in such places as Ancient Egypt or a Native American tribe. As the cartoon was meant for younger audiences it was unlike most other cartoons of the 1980s which had "announcements", although one episode lightly touched upon the issue of poaching when Raggedy Ann, Andy and their friends had to save endangered unicorns from cattle rustlers, who sought to steal their horns for personal gain.