Dorothy is a girl who lives in a farmhouse in Kansas with her Uncle Henry, Aunt Em, and little dog Toto. One day the farmhouse, with Dorothy inside, is caught up in a cyclone and deposited in a field in the Land of the Munchkins in the Land of Oz. The falling house kills the ruler of the Munchkins, the Wicked Witch of the East.
The Good Witch of the North comes with the Munchkins to greet Dorothy and gives Dorothy the Silver Shoes that the Wicked Witch of the East had been wearing when she was killed. In order to return to Kansas, the Good Witch of the North tells Dorothy that she will have to go to the "Emerald City" or "City of Emeralds" and ask the Wizard of Oz to help her.
On her way down the road paved with yellow brick, Dorothy frees the Scarecrow from the pole he is hanging on, restores the movements of the rusted Tin Woodsman with an oil can, and encourages them and the Cowardly Lion to journey with her and Toto to the Emerald City. The Scarecrow wants to get a brain, the Tin Woodman a heart, and the Cowardly Lion, courage. All are convinced by Dorothy that the Wizard can help them too. Together, they overcome obstacles on the way including narrow pieces of the yellow brick road, Kalidahs, a river, and the Deadly Poppies.
When the travelers arrive at the Emerald City, they are asked to use green spectacles by the Guardian of the Gates. When each traveler meets with the Wizard, he appears each time as someone or something different. To Dorothy, the Wizard is a giant head; the Scarecrow sees a beautiful woman; the Tin Woodman sees a ravenous beast; the Cowardly Lion sees a ball of fire. The Wizard agrees to help each of them, but one of them must kill the Wicked Witch of the West who rules over the Winkie Country.
As the friends travel across the Winkie Country, the Wicked Witch sends wolves, crows, bees, and then her Winkie soldiers to attack them but they manage to get past them all. Then, using the power of the Golden Cap, the Witch summons the Winged Monkeys to capture all of the travelers.
When the Wicked Witch gains one of Dorothy's silver shoes by trickery, Dorothy in anger grabs a bucket of water and throws it on the Wicked Witch, who begins to melt. The Winkies rejoice at being freed of the witch's tyranny, and they help to reassemble the Scarecrow and the Tin Woodman. The Winkies love the Tin Woodman and they ask him to become their ruler, which he agrees to do after helping Dorothy return to Kansas.
Dorothy uses the Golden Cap to summon the Winged Monkeys to carry her and her companions back to the Emerald City, and the King of the Winged Monkeys tells how he and the other monkeys were bound by an enchantment to the cap by Gayelette.
When Dorothy and her friends meet the Wizard of Oz again, he tries to put them off. Toto accidentally tips over a screen in a corner of the throne room, revealing the Wizard to be an old man who had journeyed to Oz from Omaha long ago in a hot air balloon.
The Wizard provides the Scarecrow, the Tin Woodman, and the Cowardly Lion with a head full of bran, pins, and needles ("a lot of bran-new brains"), a silk heart stuffed with sawdust, and a potion of "courage", respectively. Because of their faith in the Wizard's power, these otherwise useless items provide a focus for their desires. In order to help Dorothy and Toto get home, the Wizard realizes that he will have to take them home with him in a new balloon, which he and Dorothy fashion from green silk. Revealing himself to the people of the Emerald City one last time, the Wizard appoints the Scarecrow, by virtue of his brains, to rule in his stead. Dorothy chases Toto after he runs after a kitten in the crowd, and before she can make it back to the balloon, the ropes break, leaving the Wizard to rise and float away alone.
Dorothy turns to the Winged Monkeys to carry her and Toto home, but they cannot cross the desert surrounding Oz. The Soldier with the Green Whiskers advises that Glinda, the Good Witch of the South (changed to the "North" in the 1939 film), may be able to send Dorothy and Toto home. They, the Scarecrow, the Tin Woodman, and the Cowardly Lion journey to Glinda's palace in the Quadling Country. Together they escape the Fighting Trees, dodge the Hammer-Heads, and tread carefully through the China Country. The Cowardly Lion kills a giant spider, who is terrorizing the animals in a forest, and he agrees to return there to rule them after Dorothy returns to Kansas—the biggest of the tigers ruling in his stead as before. Dorothy uses her third wish to fly over the Hammer-Heads' mountain.
At Glinda's palace, the travelers are greeted warmly, and it is revealed by Glinda that Dorothy had the power to go home all along. The Silver Shoes she wears can take her anywhere she wishes to go. She tearfully embraces her friends, all of whom will be returned, through Glinda's use of the Golden Cap, to their respective sovereignties: the Scarecrow to the Emerald City, the Tin Woodman to the Winkie Country, and the Cowardly Lion to the forest. Then she will give the Cap to the king of the Winged Monkeys, so they will never be under its spell again. Dorothy and Toto return to Kansas and a joyful family reunion. The Silver Shoes are lost during Dorothy's flight and never seen again.