A peddler tells the audience a story about a magic lamp.
At one night, Jafar has brought a thief named Gazeem to bring him a piece of an artifact. Upon combining it with the other piece, it formed a scarab that forms a tiger head, the entrance to the Cave of Wonders. Jafar tells Gazeem that he may have the treasures inside, but the lamp is his.
Just as Gazeem is about to go in, the tiger head warns him that only "the diamond in the rough" is worthy to enter. When Gazeem gets inside, the tiger closes the entrance, stating that he is not the "diamond in the rough". In other words, Gazeem is not worthy to enter the cave. Jafar has to find who is worth to get in.
In the morning, Aladdin and his pet monkey, Abu, are in a run from the guards for stealing bread. They manage to escape.
When they are about to eat the bread, Aladdin and Abu see two hungry children. Because of this, they decided to give it away to them, although Abu is reluctant to do it.
Just then, the people of Agrabah are seeing a prince entering the palace. When two kids are in the way, he is about to whip them, but Aladdin arrives to save them. The prince tosses him and Abu to the mud, but Aladdin insults him by saying that a horse has two rear ends. Upon being insulted, the prince tells Aladdin that he's just a street rat.
At night, Aladdin is at his home wishing he could live in the palace.
The next day, the prince leaves the palace in anger because he's rejected. The sultan tells his daughter, Jasmine, that she has to stop rejecting her suitors because by her next birthday, she has to be married and have someone to take care of her in case her father is gone.
While thinking about how Jasmine rejects her suitors, Jafar, who is the sultan's advisor, arrives to tell him that he has to hand over his diamond ring. He hypnotizes him in order to get it. After leaving the sultan, Iago, his pet parrot, is not happy about being fed with a cracker and Jafar tells him to be patient that once he becomes sultan, he will have no problems with the crackers.
At the night, Jasmine is running away from home and orders her pet tiger, Rajah, not to look for her.
The next morning, while stealing some food and on the run from the guards, Aladdin defends Jasmine from the guards who accuse her of stealing an apple for a little boy. While doing so leads him getting captured.
Meanwhile, Jafar uses a machine combine with the sultan's diamond ring to find out that Aladdin is the "diamond in the rough" the tiger head is talking about.
For the night, he disguises himself as an old man and frees Aladdin to lead him to the Cave of Wonders. Jafar tells him that he will have the lamp inside, while Aladdin gets all of the treasures inside.
Inside the Cave of Wonders, Aladdin and Abu find a magic carpet. After getting the lamp, Abu steals a ruby, provoking the wrath of the tiger. Aladdin orders Jafar to help him, but the latter tells the former that he should give him that lamp first. After getting it, Jafar drops Aladdin to the cave. However, he finds out that he doesn't have the lamp.
Trapped, Aladdin rubs the lamp and Genie is released. He tells him that he may grant 3 wishes, but has rules. Genie uses his magic to free himself with Aladdin, Abu, and the carpet.
In the morning, after being rescued, Aladdin tells Genie of his 3 wishes, but the latter tells him that he only has 2 left. Aladdin reminds him that he didn't wish himself out of the cave, Genie did. Realizing he's been tricked, Genie tells him that this is only the time he will get a free wish. When Aladdin asks him what he will wish for, Genie replies that he wanted to be free because he is a slave to the magic lamp.
Aladdin's first wish is to become a prince.
Meanwhile, Jafar tries to get the sultan to get Jasmine to marry him, but his hypnotism fails when Aladdin, as Prince Ali, arrives in the palace. The three are arguing who is going to get Jasmine, but stopped when the latter heard it. Jafar angrily states that it is time to say goodbye to Aladdin.
In the garden, Genie tries to get Aladdin to tell Jasmine the truth of himself, but Aladdin doesn't want it because of how Jasmine would feel if she finds out he's a street rat.
Aladdin goes to the balcony to show Jasmine the magic carpet. They travel around the world using it. While traveling, Jasmine finds out that Aladdin is the same guy she saw in the Agrabah marketplace, but he manages to convince her that he is a prince, even though he dresses like a street rat.
After the romance, Aladdin, Abu, and the carpet were captured by the guards under Jafar's orders. Jafar orders them to get rid of Aladdin and they knock him out.
Aladdin is thrown to the river, but he manages to rub the lamp to let Genie out. Upon seeing him drowning, it is Aladdin's second wish to be rescued. Afterwards, Aladdin proceeds to go back to the palace.
Meanwhile, the sultan, under hypnotism, tells Jasmine that she will marry Jafar. Just then, Aladdin comes and tries to get Jafar to confess the truth that he tries to kill him. Upon seeing the snake staff, he destroys it, breaking the sultan from Jafar's control, and revealing his treachery.
Jafar is grabbed by two guards, but escapes by using a potion. The sultan offers Aladdin a position to become the next sultan, something he doesn't want to be.
Meanwhile, Jafar goes to his lab, and laughs. Iago thinks he has gone nuts and tries to snap him out of it, but Jafar stops and the reason why he is laughing because he now knows that Prince Ali is Aladdin. He then orders Iago to get the lamp.
The next day, Aladdin becomes depress about becoming a sultan and hurts Genie's feelings. He tries to apologize, but Genie refuses to accept the apology. Aladdin also hurts Abu's feelings, and tries to apologize for the outburst, but to no avail. He realizes that Genie is right that he has to tell Jasmine the truth. Just then, Jasmine calls him, but it was Iago using her voice. He gets the lamp.
Aladdin tries to tell Jasmine the truth, but is interrupted when people are cheering for him. Jafar and Iago are angered by this, and the former rubs the lamp, releasing Genie. He makes his first wish to rule up high as a sultan.
As a result, Jafar gets the sultan's clothes. Aladdin finds out that Jafar has the lamp. Because of that, Genie reluctant obeys his commands.
Jafar orders Jasmine and her father to bow down to him, but the princess refuses to do such command. Angered, Jafar tells her that she will cower before a sorcerer, and wishes to become the most powerful sorcerer in the world.
After gaining his powers, he uses his magic to reveals the truth to Jasmine about Aladdin and sends him to the ends of the earth.
Upon being send to a wintry place, Aladdin claims that he should have freed Genie when he has the chance and uses the magic carpet to go back to Agrabah.
Meanwhile, Jafar has ruled Agrabah and tries to make Jasmine his queen, but she refuses. Because of that, he wishes that Jasmine would fall in love with him. Unfortunately, Genie refuses to do such wish because it is one of the rules. When Aladdin arrives, Jasmine pretends to fall in love with Jafar.
After kissing Jasmine, Jafar has saw Aladdin trying to get his lamp. When Jasmine tries to defend him, Jafar traps her to a giant sundial. When Aladdin calls Jafar a cowardly snake, the latter transforms into a giant cobra and fights him.
Being trapped, Aladdin tells Jafar that the genie is more powerful than him. Realizing this, Jafar makes his final wish to be a genie. When Jasmine asks Aladdin of what he has done, he tells her to trust him. Just then, Aladdin reveals to Jafar that he just tricked him into wishing to become a genie so that he can be imprisoned in a lamp. Iago is pulled with Jafar inside it.
After everything goes normal, Genie throws the lamp, with the imprisoned Jafar and Iago, to the Cave of Wonders. He tells Aladdin that his final wish can be a prince again, but he decided to make his promise. Instead, Aladdin wishes Genie to be free from his lamp, finally gaining freedom.
Knowing that Jasmine is happy with Aladdin, the sultan changes his law that the princess can marry anyone she chooses, and Jasmine chooses Aladdin. Genie leaves to travel around the world.