Max, a crane, decides one day to walk away from his flock. He had been teased and put down his entire life because of his crocked wing. He can't take it anymore. He walks away, refusing to ever fly again.
Max wanders into the town of Troubadour. That night, he falls asleep underneath an ornately adorned statue.
During the night, the statue cries on Max. Magically, the tears of the statue allow the bird to hear the words of the statue, who is not a statue at all. Max discovers that the statue is really a young prince, the former Prince of Troubadour, who has been trapped inside a statue by the evil witch, Marissa.
The Happy Prince tells Max his sad tale: Marissa has entombed his parents, sent away the King's advisors on a endlessly sailing ship (including The Prince's love of his life, Gwen) and put the townspeople of Troubadour under a spell.
The Happy Prince asks his new friend Max to do him a favor, remove the jewels from his body and give them to the poor of Troubadour.
While trying to fulfill The Prince's wishes, Max meets three new friends: Pinky, a former resident of the castle who only wants a happy home, Cora Brown, a smart, take-charge squirrel who is dealing with the death of her brother, and Mr. Mouse, a naive and sugar-loving town mouse who just wants the town sweets to return to normal.
The four animals survive several fur-raising adventures while attempting to fulfill the Prince's wishes. During their adventures, the witch Marissa, discovers The Prince's ability to talk to animals. She decides to melt the statue, thus killing the human prince.
Max cannot let this happen. He had to do the one thing he promised himself he would never do again, his has to fly.
In order to save The Prince, Max must find Gwen because she can lead Max to the Sorcerer, who is the only person who can defeat Marissa. This is the only way to save The Happy Prince and restore the townspeople of Troubadour to their formerly happy lives.