In Prokoviev's story Peter is a Soviet "Young Pioneer", a member of an organization for children organized by the local party, roughly equivalent to the scouts. He stays at his grandfather's home in a forest clearing. One day Peter goes out into the clearing, leaving the garden gate open, and the duck that lives in the yard takes the opportunity to go swimming on the nearby pond. She starts arguing with a little bird ("What kind of bird are you if you can't fly?" - "What kind of bird are you if you can't swim?"). Peter's pet cat sneaks up on them, and the bird – warned by Peter - flies into a tall tree while the duck swims to safety in the middle of the pond.
Peter's grandfather scolds Peter for being outside in the meadow ("Suppose a wolf came out of the forest?"), and, when Peter defies him, saying that "Pioneers are not afraid of wolves", his grandfather takes him back into the house and locks the gate. Shortly afterwards "a big, grey wolf" does indeed come out of the woods. The cat quickly climbs into the tree, but the duck, who has excitedly jumped out of the pond, is chased, overtaken and gulped down by the wolf.
Pioneer Peter fetches a rope and climbs over the garden wall into the tree. He asks the bird to fly around the wolf's head to distract him, while he lowers a noose and catches the wolf by his tail. The wolf struggles to get free, but Peter ties the rope to the tree and the noose only gets tighter.
Some hunters, who have been tracking the wolf, come out of the forest ready to shoot, but Peter gets them to help him take the wolf to the zoo in a victory parade (The piece was first performed for an audience of pioneers during May Day celebrations) that includes himself, the bird, the hunters leading the wolf, the cat and grumpy grumbling Grandfather ("What if Peter hadn't caught the wolf? What then?") In the story's ending, the listener is told that "if you listen very carefully, you'd hear the duck quacking inside the wolf's belly, because the wolf in his hurry had swallowed her alive."
In the Disney adaptation the pets are given names: "Sasha" the bird, "Sonia" the duck, and "Ivan" the cat. As the cartoon begins, Peter and his friends already know there is a wolf nearby, and are preparing to catch him. The hunters get names at a later point in the story: "Misha", "Yasha" and "Vladimir". Peter day-dreams of hunting and catching the wolf and exits the garden carrying a wooden "pop-gun" rifle with the purpose of hunting the wolf down. At the end, in a complete reversal of the original (and to make the story more child-friendly), it turns out that the duck has not been eaten by the wolf. The wolf is shown chasing the duck, who hides in a tree's trunk. The wolf attacks out of view, and returns in view with some of the duck's feathers in his mouth and licking his jaws. Peter, the cat, and the bird assume the duck has been eaten. After the wolf has been caught, the bird is shown mourning the duck. The duck comes out of the tree trunk at that point and they are happily reunited.