The fairy has grown old enough to be Pinocchio’s mother, rather than his sister. Pinocchio is happy to have a mother. The fairy says that she will transform Pinocchio into a real boy if he learns to be obedient, to study and work hard, and to always be truthful. Pinocchio agrees that he has improvements to make in these areas and vows to be better.

Pinocchio hopes that he will find Geppetto one day; the fairy believes that he will see him again.

The fairy tells Pinocchio that he must go to school and then learn a trade. Pinocchio reluctantly agrees.

The boys at school initially mock and tease Pinocchio for being a puppet, but they grow to respect him after he kicks one boy and elbows another. Pinocchio’s teacher and the fairy warn him not to be led astray by his more rebellious friends; he is sure that he won’t be.

One morning, the Terrible Shark is near the shore. Pinocchio wonders if it is the same one who ate his father; he agrees to skip school and go with the naughty children to look at it.

They reach the shore, and there is no shark. The boys, laughing, tell Pinocchio that they have tricked him. They tell him that he is a goody-goody who only cares about studying. Pinocchio mocks them in return, and the group gets into a fight, throwing books at Pinocchio as he kicks at them. A crab counsels them to stop fighting, but they ignore him.

One of the boys, Eugene, is badly injured when Pinocchio’s heavy arithmetic book hits him in the head. The other boys run away. Pinocchio remains, nursing him and reflecting that he should have listened to his mother and his teacher and stayed away from the naughty boys.

Two Carabineers (armed policemen) arrive and decide that Pinocchio should be arrested for hurting the boy, even though Pinocchio tries to explain that it wasn’t his fault. Pinocchio runs away, chased by a mastiff that the police set on him.

Pinocchio leaps into the water. The mastiff, Alidoro, follows but realizes he can’t swim. Pinocchio tows Alidoro back to shore and then swims away again, still fearful of Alidoro.

Pinocchio is about to swim to the shore when he is caught in a fisherman’s net. The fisherman reels him in and demands to know what kind of fish he is and how he is best prepared. Pinocchio tries to explain that he is a puppet, not a fish, but the fisherman does not believe him and will not set him free.

The fisherman ties Pinocchio’s hands and feet together, rolls him in flour, and is about to throw him into the hot pan.

Suddenly, Alidoro arrives in the fisherman’s cave, demanding some fish. The fisherman kicks at him. Pinocchio, recognizing Alidoro, begs Alidoro to save him. Alidoro grabs Pinocchio in his mouth and runs him to safety.

Pinocchio walks toward the fairy’s house. A man tells him about Eugene, who was badly injured by a rogue called Pinocchio. Pinocchio (pretending not to be himself) says that he has heard that Pinocchio is a wonderful person and an obedient son. When Pinocchio’s nose starts to grow, he quickly clarifies that the bad things the man heard about Pinocchio are all true, and his nose shrinks again.

Pinocchio arrives at the fairy’s house. A snail in the top window tells him that the fairy is asleep and does not want to be disturbed. The snail takes nine hours to reach the door to let Pinocchio in, by which time Pinocchio has kicked part of the door in and is stuck. The snail takes three more hours to bring Pinocchio food, but it is made of cardboard, chalk, and alabaster.

Pinocchio wakes up on a sofa. The fairy forgives him but asks him not to get into more mischief. If he can be good, she says, she will turn him into a real boy the next day.

The fairy allows Pinocchio to deliver invitations to his celebration the next day but reminds him that he will suffer the consequences if he chooses to disobey her instruction. She wants him to only deliver the invitations and then come straight back. Pinocchio must go to the house of his best friend, Lamp-Wick, three times before he finds him at home. Lamp-Wick, who is the naughtiest boy in the school, explains that he is going to the Land of the Toys at midnight.

Pinocchio declines Lamp-Wick’s invitation resolutely, explaining that he promised the fairy that he would be good and come straight home after delivering the invitations, but he lingers and continues to ask questions about the Land of Toys. The wagon that will be going to the Land of Toys arrives.

The wagon, driven by a cheerful man and pulled by 12 donkeys in leather, laced shoes, is crowded with boys. Lamp-Wick jumps on even though the driver says that it is full. Pinocchio explains to the driver that he will stay and study and have a productive life, but Lamp-Wick and the boys continue to beg and hound him to come to the land of no school, no teachers, and constant holiday.

Finally, Pinocchio agrees to come. He goes to sit on one of the donkeys, but it bucks him off. The driver bites one of the donkey’s ears off, and Pinocchio sits on it again, but it bucks him off a second time. Pinocchio bites the donkey’s other ear off and finally is able to sit astride it. As they travel to the Land of Toys, Pinocchio hears the donkey weeping and whispering that Pinocchio is a “simpleton” who will regret his decision and weep with regret.

They arrive at the Land of Toys, which is filled with other boys. Pinocchio spends five happy months there, playing all day.

Pinocchio is shocked one morning to find that he has grown long, soft ears like a donkey’s. A mouse tells Pinocchio that all the boys who swear off study and school will eventually turn into donkeys. Pinocchio thinks of the fairy and desperately wishes that he could turn back time and not have left for the Land of Toys.

Pinocchio puts a sack on his head and goes to see Lamp-Wick, who is also wearing a sack. Initially, they both lie, saying that they are wearing the sacks for a hurt knee or leg, but eventually they both take their sacks off and see that they both have donkey ears. They start to laugh, but their laughter turns into the “Haw! Haw!” of donkeys. Soon, they can’t walk and begin to canter around. The wagon driver comes to the door.

The little man who drives the wagons brushes the donkeys, who are ashamed to be donkeys and stand with their heads downcast and their tails between their legs, and then takes them to a market to be sold. The little man drives around the world finding lazy boys who are tired of school and makes millions by selling them once they turn into donkeys.

Lamp-Wick is sold to a farmer, and Pinocchio is sold to a circus owner. Pinocchio is beaten for being unwilling to eat straw or hay. He stands sadly in his stall, wishing that he had never gone to the Land of Toys and that he had instead been patient with his studies. Pinocchio learns how to dance, jump, bow, and balance on his head.

A crowd arrives to see Pinocchio perform. He prances, runs, and bows for the audience. He sees the fairy in the audience, wearing a medallion of a puppet; he recognizes her, tries to call out to her, and then cries. The fairy disappears.

Pinocchio develops a physical disability while trying to jump through hoops. A veterinarian declares that he will never recover, and he is sold off cheaply to a man who wishes to make his hide into a drum. The man ties a rope around Pinocchio’s leg and ties a stone to his neck before throwing him into the sea for him to drown.

The man, who expected a dead donkey, is shocked to find a puppet tied to the rope when he reels it back in. The man is angry, and Pinocchio suggests that it must be the effect of the sea water. He tells the man his life story: that he was a puppet who listened to bad advice and ran away from home and subsequently was turned into a donkey. Pinocchio reasons that his mother, the fairy, must have sent all the fish to nibble away his donkey flesh, which returned him to being a puppet.

The man decides that he will sell Pinocchio at the market as firewood, but before he can grab him, Pinocchio jumps into the water and swims away. He sees a goat bleating on a rock in the middle of the sea and swims to it. Its hair looks like the hair of his mother, the fairy.

Suddenly, the Terrible Shark appears. The goat urges Pinocchio to swim quickly, but the shark swallows him before he can reach the rock and the goat. He cries inside the belly of the shark. A voice speaks to him in the darkness of the shark’s belly, comforting him; it is a fish—a tunny—who has been swallowed. It explains to Pinocchio that the shark is a mile long and that they can do nothing but wait to be digested. Pinocchio sees a light in the distance, and the fish suggests that it must be another fish waiting to be digested. Pinocchio says farewell to the tunny and goes to investigate the source of the light.

At a small table lit by a candle stuck in a bottle, Pinocchio finds Geppetto eating small fish. They are amazed and delighted to be reunited. Pinocchio tells Geppetto about his misadventures since he last saw him, and Geppetto explains that he has been living inside the shark for two years since he was eaten, as Pinocchio witnessed from the shore. Pinocchio convinces Geppetto that they should try to escape through the shark’s mouth; Geppetto is nervous since he can’t swim, but Pinocchio assures Geppetto that he can hold onto Pinocchio’s back.

They reach the shark’s mouth, but the shark sneezes, sending them back into its stomach and extinguishing Geppetto’s candle. They feel their way back to the shark’s mouth, which is open as the shark sleeps. Geppetto holds onto Pinocchio’s back, and they leap into the ocean.

Pinocchio swims as hard as he can. Geppetto is shivering and feverish, and Pinocchio begins to weaken, but there is no land in sight. Luckily, the tunny appears; it followed Pinocchio and Geppetto’s example and escaped the shark’s mouth, and it offers to swim them to shore.

Pinocchio kisses the tunny in gratitude and then helps his father onto the shore; Geppetto is exhausted. They pass the fox and the cat, who are impoverished; the cat is now blind, and the fox has lost its tail. They beg Pinocchio for alms, but he tells them proverbs that remind them that thieves end up poor and alone.

Pinocchio helps Geppetto into a cottage. He is amazed to see the cricket there. The cricket reminds Pinocchio of the time he killed him with a hammer; Pinocchio is contrite. The cricket says that the cottage was given to him by a goat with blue hair who mourned the loss of her son, Pinocchio; Pinocchio realizes that it was his mother, the fairy, and wishes that she was still here.

Pinocchio draws 100 pails of water from the well of a farmer next door in return for a glass of milk for his unwell father, Geppetto. He begins to do this every day. He is saddened to see his old friend, Lamp-Wick, who is an old and broken donkey on the farm.

Pinocchio finds an old book, fashions a pen, and studies hard. In addition to drawing 100 pails of water every day for Geppetto’s glass of milk, he also learns how to weave baskets to sell to make money to keep him and Geppetto fed and comfortable. One day, he comes across the snail, who tells him that the fairy is ill and in hospital. He gives the 50 pennies he had saved for clothes for himself to the snail to deliver to the fairy, preferring to live in rags and help his mother.

The next day, Pinocchio wakes up and is amazed to find that he has turned into a human boy. He is dressed in beautiful clothes, and their home is comfortable and furnished. Geppetto has regained his youth and vitality and is working as a wood carver again. In his pocket, Pinocchio finds the 50 pennies and a note from the fairy, thanking him for his kind heart. The wooden puppet that used to be Pinocchio is an inanimate pile in the corner of the room.