The peach originally started out as a part of an old peach tree owned by Aunt Spiker and Aunt Sponge that never bore fruit. One day, however, the women's nephew James accidentally spills a bag of "crocodile tongues" (which he received from a mysterious man) all over the ground surrounding the tree. The "tongues" escape into the ground and affect the creatures that interacted with them, including the old tree, creating extraordinary changes within them. The tree, influenced by the "tongues," bears a peach that grows to immense proportions. Spiker and Sponge later use the giant peach as an attraction to make money. Meanwhile, the peach became a residence to the ground dwellers that were also changed by the "tongues." During that night, James eats a portion of the peach and then finds a large hole inside the fruit and crawls into it, where he finds the peach's residents (Mr. Grasshopper, Mr. Centipede, Earthworm, Miss Spider, Mrs. Ladybug and Glowworm). In order to escape James' aunts, Centipede cuts the stem holding the giant peach to the tree, and the peach rolls away to the Atlantic Ocean with James and his new friends inside it.
The peach serves as the home for the characters over the course of their journey, but also has to endure attacks from a robot shark and a cloud rhinoceros that threaten the group. With the aid of various seagulls tied to it, the peach becomes airborne and allows the group to travel great distances. Eventually, the peach reaches New York; unfortunately, the aforementioned cloud rhinoceros strikes the peach with a lightning bolt, causing the wooden fence pickets (which were used as a walkway) to give way, severing the silken strings between the seagulls and the peach. No longer supported by the seagulls, James' insect friends drift away while the peach plummets down and is impaled upon the tip of the Empire State Building. James emerges from the peach and is welcomed by the citizens while the peach's remains are lowered down to the ground. Shortly after, James' insect friends arrive and land safely onto the peach. With James' permission, over 10,000 children eat the flesh of the peach. Although all that is left of the peach is its hollowed-out stone, the pit becomes a new home for James and his bug family, as well as a tourist attraction in Central Park.