Book: Story Bag

A magical log falls off a wagon and rolls through an Italian town causing considerable damage and some injuries. It comes to rest in front of the house of Geppetto, a poor wood carver, who carves a puppet, Pinocchio, from it. To Geppetto's surprise, the puppet comes to life and to his dismay, it becomes very mischievous. Geppetto sells his only coat to provide schoolbooks for Pinocchio; however, the rambunctious puppet goes on several adventures, dreading school. He joins a puppet theater and is almost eaten by the gigantic puppet master. Pinocchio lies to get out of the situation, claiming misery and poverty in his family, and the puppet master gives him five gold coins. He then meets Fox and Cat, two crooks who trick him out of his money, telling him to plant the coins in the ground in order to grow a "money tree". The watchful Blue Fairy, who encourages him to give up his obnoxious ways, saves him from a hanging by the crooks. She gives Pinocchio medicine and when he refuses it, coffin-bearing rabbits appear. Pinocchio immediately consumes the medicine, lying that he wanted to drink it in the first place but that the Fairy would not let him.

When the Fairy asks Pinocchio about the gold coins he had, Pinocchio lies to her and says he lost them, causing his nose to grow. The Fairy, knowing of his constant fibbing, tells him that there are two types of lies: those with short legs and those with long noses. Pinocchio promises the Fairy that from there on he will try his best to be good.

When Pinocchio is sent to jail for his encounters with the Fox and Cat, he meets Lucignolo (Leonardo in the American dubbing), another truant thief who is let out soon after Pinocchio is admitted in. A few months later, as part of a celebration for the birth of an emperor's son, he is set free he stumbles across the grave of the Blue Fairy, who supposedly died of grief because of his antics. After nearly drowning in the ocean in an attempt to save his father, he washes up on the shore of a city where he discovers that the Blue Fairy has faked her death in order to forgive Pinocchio.

Once again starting anew, he is on his way to school when he gets into a fight with his schoolmates. One of them tries to throw a book at him, but when he ducks the book hits his classmate Eugenio instead, who is knocked unconscious. Thinking that he is dead, the others run away, leaving Pinocchio at the scene. After being arrested by a carabineer and escaping, he joins Lucignolo in a trip to "Fun Forever Land", where all is play and no work or school. There, boys turn into donkeys who are sold for hard labor.

Pinocchio escapes and, wanting to make up for his mischievous ways, agrees to work at a farm. Later, he finds Lucignolo dying in a stable on the farm. Trying to reunite with his father, he is swallowed by a Whale and together they escape from its belly. As a reward for his efforts to strive for moral prudence, the Blue Fairy finally reforms Pinocchio and he becomes a real boy. The film ends with Pinocchio going to school at last, while his shadow, still in the shape of a puppet, chases a butterfly into the hills of the countryside, a lasting memory of his adventures.