The plot concerns the attempts of four children to save the life of their friend, in the process, they also learn about the origins of Halloween and the meaning of some symbols associated with it.
The movie was unrated by the Motion Picture Association of America.
In a small town on Halloween night, four children are seen getting ready to go out trick-or-treating. Jenny is looking for a broomstick to go with her witch costume, Ralph is getting wrapped up in bandages to look like a mummy, Wally is admiring his monster costume in front of a mirror and Tom Skelton is putting on his skeleton costume. The children do not want to be late to meet their best friend Pip but, when they all meet up, they are puzzled to find that Pip is not there.
The children go to Pip's home and are surprised to find no bowl of candy, no jack-o-lanterns or other decorations outside the house. They are just in time to see Pip being taken away in an ambulance and find a note on his front door which says that he has been taken to hospital because he has appendicitis. The children decide to go to the hospital to be with their friend. Tom suggests taking a short cut through a ravine. On the edge of the ravine, they see Pip running through the woods. Wally thinks that it might be Pip's ghost but the other children think that Pip has been playing a joke on them and that they should follow him.
The four friends lose sight of Pip but eventually arrive at what they all agree looks like a haunted house. Entering the house, they find that it belongs to Mr. Moundshroud, a tall, thin bald man with a long pointed nose and chin. Mr. Moundshroud says that he does not have any candy to give them but the children agree that returning their friend Pip, who they saw heading towards the house, would be a better treat. Mr. Moundshroud asks the children why they are dressed as a witch, a mummy, a monster and a skeleton and is angry when they can not answer him.
Outside Moundshroud's house, the children notice the Halloween Tree of the title. The tree contains thousands of pumpkins, each one with a different face carved into it. Pip's ghost is seen climbing up the tree and taking a jack-o-lantern with a face that looks like his. Pip clutches the pumpkin and flies away. Mr. Moundshroud appears to be furious that Pip has taken his pumpkin and sets off to pursue him. The four children offer to go with him and help bring their friend back. Moundshroud is reluctant at first but, seeing the opportunity to educate the four friends, agrees.
Moundshroud and the four children follow Pip back through time and space. Arriving in ancient Egypt, the children learn that the Egyptians celebrated a holiday similar to Halloween four thousand years ago and are told the reasoning behind mummification. In Dark Ages Britain, they see Samhain celebrations and learn something about real-life witches and their persecution. Arriving at an unfinished Notre Dame Cathedral, the children learn that images of monsters were carved into the building to help people face their fears. In modern-day Mexico, the children join in celebrations for el Día de los Muertos and realise that the use of skeleton and skull symbols helps people to confront their fear of death.
In each of the first three locations, one of the children saves Pip's spirit from danger but each child is unable to get him to come back with them. Instead, Pip uses the magic pumpkin to escape to the next location. Eventually, in a Mexican tomb, Moundshroud tells the children that they have failed to save their friend and that he is taking away the pumpkin which contains Pip's spirit. Realising that Moundshroud is a personification of Death, the children each offer him one year off their lives if he will let their friend live. Concluding that it is a good bargain, Moundshroud agrees. The children are transported back to Moundshroud's home and Moundshroud thanks them for an enjoyable evening.
The children rush to Pip's house and see him alive and well at his bedroom window. Pip tells them that while he was having his appendix removed in hospital, he had dreams about going to Egypt, ancient Britain, Notre Dame Cathedral and Mexico. He thanks his friends for saving his life.
The cartoon ends with Moundshroud disappearing into a pumpkin that looks like him on the Halloween Tree. A strong wind carries away all the pumpkins from the tree, except for the one which looks like Pip, which stays in front of his house.