The story starts in a forest called Holiday Woods with seven trees containing doors leading to towns representing various holidays: Valentine’s Day, St. Patrick’s Day, Easter, Thanksgiving, Christmas, Halloween and Independence Day. Halloween Town is a fantasy world filled with citizens such as deformed monsters, ghosts, ghouls, goblins, vampires, werewolves and witches. Jack Skellington, a skeleton known as The Pumpkin King, leads them in organizing the annual Halloween holiday (“This is Halloween”). However, in a monologue, Jack reveals he has grown weary of the same routine year after year, and wants something more (“Jack’s Lament”). Wandering dejectedly in the woods, he stumbles across the seven holiday doors and accidentally opens a portal to Christmas Town, whose residents are charged with organizing the annual Christmas holiday (“What’s This?”). Impressed by the bright and cheery feeling and style of Christmas, Jack presents his findings and his understanding of Christmas, to the Halloween Town residents. However, they fail to grasp his meaning and compare everything to their ideas of Halloween, although there is one Christmas character they can relate to: the fearsome lobster-like king of Christmas Town who flies at night, named “Sandy Claws” (“Town Meeting Song”). Jack is dismayed that no one understands the feeling of Christmas, obsessively tries to study the holiday but fails to grasp any further explanation of it. He ultimately decides that it’s unfair for Christmas Town alone to enjoy the feeling and there’s no reason why he shouldn’t be able to, and announces that the citizens of Halloween Town will take over Christmas this year (“Jack’s Obsession”).
Jack’s obsession with Christmas leads him to usurp the role of Santa. Every resident is assigned a task, while Sally, a beautiful rag doll woman created by the town’s mad scientist, starts falling in love with Jack (“Making Christmas”). However, after a vision of a burning Christmas tree, she alone realizes that his plans to run Christmas will become disastrous, but has no luck convincing him. Jack assigns Lock, Shock and Barrel, a trio of mischievous children, to abduct Santa and bring him back to Halloween Town (“Kidnap The Sandy Claws”). Against Jack’s wishes and largely for their amusement, the trio deliver Santa to Oogie Boogie, a gambling-addict bogeyman who plots to play a game with Santa’s life at stake (“Oogie Boogie’s Song”).
Christmas Eve arrives and Sally attempts to stop Jack with fog, but fails to do so thanks to Jack’s ghost dog Zero and his glowing nose allowing Jack to embark into the sky on a coffin-like sleigh pulled by skeletal reindeer, guided by Zero. Down on the ground, Sally prays that her premonition does not come true ( “Sally’s Song”). Jack begins to deliver presents to children around the world, but the gifts (shrunken heads, Christmas tree-eating snakes, pumpkin jack-in-the-boxes, vampire teddy bears, toy ducks with sharp teeth, man-eating wreaths, bats, etc.) only terrify the recipients. The children alert their parents, who call the police, who call the military. The air raid siren is activated, and Jack is spotted with search lights, after which he is then shot at by air raid artillery cannons. Initially mistaking the firing for a celebration, he simply flies higher. However, after a reindeer is hit, and his sleigh is grazed, he realizes that he is being targeted, but the next cannon destroys the sleigh, and Jack falls from the sky to Earth, devastating Halloween Town’s citizens. Thought to have been dead by the attack, Jack crash-lands in a cemetery unharmed. Although he is depressed by the failure of his plan, he quickly regains his old spirit, having come up with new ideas for next Halloween. He then rushes back home to rescue Santa and put things right (“Poor Jack”).
Meanwhile, Sally attempts to free Santa, but is captured by Oogie. Jack slips into the lair and frees them, then angrily confronts Oogie. Almost immediately, Oogie springs several traps on Jack, who manages to dodge them, and Oogie attempts to flee. However, Jack pulls one of Oogie’s loose threads, revealing him to be nothing more than a collection of snakes and insects, which are all incinerated, save for the last one, which Santa squashes with his boot. Jack apologizes to Santa for his actions, and Santa, while still annoyed with Jack for attempting to take over his job, assures him that he can fix things, and leaves to get rid of the evil toys and deliver the right presents to the world’s children.
After Jack returns to Halloween Town, the townspeople celebrate that he’s alive, and Santa, after fixing Christmas, returns and makes snow fall over Halloween Town in reconciliation between himself and Jack. The townspeople are confused by the snow at first, but soon begin to play happily in it, finally realizing what Christmas is about. Jack spies Sally heading to the graveyard, and follows her. Atop the graveyard’s big hill, Jack admits that he reciprocates Sally’s romantic feelings for him, and they declare their new found love, and kiss on the hill (“Finale/Reprise”).