For several hundred years, Mr. Edward Magorium (DUSTIN HOFFMAN) has been building toys, and for the past 113, he's been the owner of "Mr. Magorium's Wonder Emporium," a toy store figuratively and literally filled with magic. Yet, as much as the 243-year-old enjoys the place, he realizes it's his time to leave, and thus wants his 23-year-old protégé and current manager, Molly Mahoney (NATALIE PORTMAN), to take over.
A former pianist prodigy, Molly is stuck in her current life, unable to compose the great symphony of which she's always dreamed. Accordingly, her self-doubts extend to taking over the toy store where the tattooed and mustached Bellini (TED LUDZIK) creates the toys down in the basement.
Among those who admire his work is Eric Applebaum (ZACH MILLS), a 9-year-old kid with a penchant for hats who has a difficult time making new human friends, preferring to hang out with real and toy animals. Following his mother's advice, however, he decides to reach out to Henry Weston (JASON BATEMAN), the always-working accountant who Magorium has hired to do his books in anticipation of Molly taking over.
Henry doesn't have time for Eric and he certainly doesn't believe that the store is magical. Yet, when that very establishment adversely reacts to news that Magorium will be leaving them for good, Henry begins to question his doubts, all as the venerable toy man tries to reassure Molly that all will be well without him there.