Pooh, Rabbit, Tigger and Piglet are walking through the forest collecting feathers. Pooh and Tigger wonder about where the feathers came from, and Piglet offers to demonstrate a magic trick. He is dismissed by Tigger and ignored by Rabbit, but Pooh is amazed at the thought of Piglet doing magic, and so Piglet gets a chance to perform. He attempts to make a rabbit appear out of his hat, but winds up finding Gopher instead. The scene changes, and we find Owl running into a duck while flying across the sky. Owl lectures the duck about having the right of way, and a flock of ducks flies past, knocking Owl out of the sky. He lands on top of Rabbit and says "good day" to everyone.
Rabbit accuses Owl of being the source of the mysterious feathers and Pooh suggests that they "put (the feathers) back where they belong". Rabbit agrees, and they try to stick the feathers back onto Owl using Pooh's honey, making a horrible mess of things. Rabbit tells everyone present that Owl is going bald; Owl expresses shock and disbelief at this statement. Rabbit explains the seriousness of the situation, in that Owl will soon lose all of his feathers, and without his feathers he will be unable to fly. Owl argues that he can fly perfectly; Rabbit reminds him that he crashed very recently, and Owl is forced to acknowledge this. Piglet wonders aloud if having crashed into numerous ducks could have caused Owl's crash; Tigger dismisses this idea. Pooh and Tigger tell Owl that they are very sorry about his situation, and Rabbit suggests that he go home and get some rest. Owl agrees, and goes home.
Owl paces back and forth. He looks at himself in the mirror and, seeing all the feathers that have fallen off of him, comes to agree with Rabbit that he is losing his feathers. Owl falls into despair, and sits in his armchair. Pooh, Tigger, Rabbit, Piglet and Eeyore arrive and announce that they have come to cheer Owl up. Owl thanks them but says that he is too miserable for their plan to work. Piglet offers to perform a magic trick, an idea that is dismissed by Eeyore, But Piglet starts to perform the trick anyway. He is trying to make flowers appear, and he is successful, except that there is a bee in the flowers, which stings Owl and sends him flying out of the roof of his house, only to come crashing down onto his armchair, which breaks it. Rabbit says that they must find a way to help Owl, and Pooh agrees.
Later, Pooh and Owl are seen high up on the branch of a very tall tree; Owl has badminton rackets strapped to his wings. Pooh tells Owl that he will be flying again in no time; Owl asks him if he is "quite certain that badminton rackets are a suitable substitute for wings". Pooh assures him that the rackets have never failed him before, but after Owl attempts to fly and crashes to the ground Pooh reveals that he has never actually tried it. The scene changes and we find Tigger yelling encouragements at Owl, who is walking on enormous stilts. Owl is very happy with this solution until one of the stilts falls into Gopher's hole, and Owl goes plunging into the darkness. Later, Piglet is performing another magic trick for Rabbit and Pooh. He is attempting to make Tigger disappear, and asks the audience to cover their eyes, which they do. Piglet fails to make Tigger vanish, but Pooh, having never opened his eyes, believes that Piglet has not only made Tigger disappear, but himself and Rabbit as well. After Rabbit uncovers Pooh's eyes, Pooh believes that Piglet has made everyone reappear, and he is amazed. Eeyore appears, and Rabbit tells him that he is supposed to be cheering up Owl. Eeyore says that Owl is too depressed for him to be able to do such a thing. Piglet wonders why Owl is unable to fly, and suggests that it may just be in his head. Piglet expresses a belief that Owl needs him, and wonders what he could do to help.
Owl sits alone by a pond, staring dejectedly into the water. Piglet enters the scene and offers to show Owl a magic trick, which Owl declines. Piglet proceeds to do the trick anyway, and he succeeds in flying (he is attached to a rope that is hung over a tree branch, and Pooh is pulling the rope on the other side). Piglet comes back to the ground and Owl, having believed Piglet's trick, asks Piglet is he could make him fly as well. Piglet says that he could, and asks Owl to repeat the magic spell after him. They do this, and Owl, after flapping his wings, begins to fly. Pooh congratulates Piglet on his work.
Later on, Pooh lies with Christopher Robin on a hill, finishing the story of what has happened in the episode, which he is telling Christopher. Christopher Robin explains to Pooh that the mysterious feathers are not Owl's, they are from Christopher Robin's pillow, and he reminds Pooh of the pillow fight they had a few days prior to the events of the episode. Pooh remembers this, and Christopher Robin says "silly old bear".
The episode appears to be over, but then Piglet appears suddenly and offers to perform a magic trick, claiming that he can now truly pull a rabbit out of his hat. Christopher Robin accepts the offer, and Piglet does the trick. However, instead of finding a rabbit, he finds a clone of himself, another Piglet, which he pushes back into the hat. Piglet suggests that he may want to take up something "less confusing" than magic, and the episode ends.