Harold, a curious four-year-old boy, possesses a magical purple crayon that allows him to create anything he imagines by drawing it.

One night, Harold wants to take a moonlit walk, but since there is no moon, he draws one. He also draws a path to walk on and embarks on various adventures. These include meeting a dragon, boating through deep waters, enjoying a picnic with nine different kinds of pies, and flying in a hot-air balloon that saves him from a fall. As he grows tired, Harold searches for his bedroom window to go to sleep. Despite drawing numerous windows and an entire city, he doesn't find his own. Eventually, he recalls where his window is, draws his room and bed, and falls asleep.