The Whos, who resemble humans and live in the town of Who-ville, are very excited about Christmas. The one person who is not happy, though, is the grouchy, irascible, green-furred Grinch, whose heart was "two sizes too small" at birth. He resides in his cave with his dog, Max, who is his everything, from servant to friend. He only visits Who-ville to buy food and torment the Whos. As they were running out of food, they had to visit Who-ville. Grinch likes to be mean to everyone, every time.
One day, Cindy Lou, the six-year-old, observes that her mother Donna is working too hard to care for both herself and her twin young brothers, Buster and Bean. Cindy Lou first intends to write a letter to Santa Claus in an attempt to assist her mother. However, she changes her mind after accidentally meeting the Grinch, who mockingly informs her that she should speak with Santa in person if the situation is so serious. On the way, Grinch meets one of his neighbors Bricklebaum, who informs him that this year’s Christmas is going to be three times bigger than the previous year. Cindy Lou then decides to travel to the North Pole to speak with Santa. Donna informs her that a round trip to the North Pole would require a month. So Cindy drops the plan and decides to come up with another idea.
Grinch is shocked to see Bricklebaum come up with a 100 times bigger Christmas tree, which leads him to spoil the tree-lighting ceremony. Meanwhile, Cindy chooses to attempt, with her friend’s assistance, to catch Santa. As Christmas draws near, the Grinch tries to spoil a tree-lighting ceremony, but it backfires, and he remembers his confused early years spent abandoned and alone at an orphanage. A lost and lonely youngster, he faced Christmas in a place where no one seemed to care or even acknowledge him. He received no presents, no cards, and no tree. And he concluded that this was the worst day of the entire year.
And they sit down all together, and they'll feast, which is something the Grinch could not stand. The Grinch, unable to cope with these recollections, quickly resolves to take Christmas from Who-ville to ease his pain. Grinch explains to Max his plan of stealing Christmas from Who-ville. And the plan is about Grinch becoming Santa Claus. Meanwhile, Cindy plans to team up with her friends to catch Santa. To become a Santa, he needs a red suit, a white beard, and a reindeer to run the sled. He and Max end up with a fat reindeer that the Grinch names Fred. Cindy explains her plan to her friends, and they all agree to work on it. Grinch, Max, and Fred take a sled from his neighbor Bricklebaum. Cindy and her friends are ready with the trap for Santa. Following a trial run, Max and the Grinch learn that Fred has a family, and the Grinch reluctantly decides to allow Fred to accompany them home.
After creating a Santa Claus mask and building dozens of devices to aid him in his scheme, on Christmas Eve, Max—who is too motivated by the Grinch to drive the sleigh instead of Fred—goes down to Who-ville to steal the gifts and decorations from each house. He pilfered pop guns, tricycles, drums, checkerboards, bicycles, roller skates, popcorn, and plums. Video games, goofballs, gadgets and gizmos, and dolls with weird names. After slipping into Cindy Lou's trap, he soon comes across her. The Grinch is touched by her appeal to lessen her mother's job and by her suggestion that he should listen to the Whos sing to find solace in their song. The Grinch, unable to let go of the loneliness that Christmas gave him, carries out his purpose despite this.
The Grinch and Max steal every Christmas gift and decoration before returning to Mount Crumpit to get rid of them. When the Whos awaken, they discover that the decorations and gifts have disappeared, which shocks and disappoints them. Cindy Lou thinks that she was the reason that made Santa mad and feels guilty about her trap, but Donna reassures her that Cindy Lou is the nicest thing that has ever happened to her and that Christmas is not about gifts. As the Whos sing "Welcome Christmas" together, the Grinch is startled to learn that they are celebrating the holiday despite his thievery. He finds himself lost in their song, his shrinking heart joyfully tripled in size as he sees Cindy Lou and recalls her advice.
Later, the Grinch tries to salvage the sleigh as it starts to slide over Mount Crumpit. When Fred and his family help him, he succeeds. The Grinch and Max secure the sleigh and slide back to Who-ville to return the stolen goods. The heartbroken Grinch apologizes to the Whos for what he did and then goes back to his cave.
Later, the Grinch presents Max with a Christmas gift for the first time, and Max is surprised. After becoming sympathetic to the Grinch, Cindy Lou extends a Christmas dinner invitation to him and Max to celebrate Christmas at her home, which he hesitantly accepts. As he is seated for dinner, he realizes that what he hated most about Christmas was being alone and his resentment at being ignored. With that, the Grinch at last accepts the Whos' friendship and raises a glass to celebrate Christmas with them.
