A girl named Kayla falls asleep the night before her birthday, looking forward to a big surprise present that her parents announced. While she sleeps, Kayla's plushies come to life to prepare for her party. Kayla's teddy bear, Fatty Bear, decides to make a chocolate chip cake for the party and accepts the help of Kayla's stuffed bunny, Matilda Rabbit, in baking it, while Kayla's doll, Gretchen, volunteers to decorate Kayla's room for the party, including making a sign on Kayla's bulletin board saying, "Happy Birthday". Fatty Bear and Matilda Rabbit then head to the kitchen in order to start making the cake.
Using a bone and a ribbon he found, Fatty Bear lures the puppy back into her present box and wraps the box back up. After baking the cake for the party and returning the missing letters, Fatty Bear jumps onto Kayla's bed and goes back to stuffed animal form as morning comes. Kayla then awakens and expresses delight with how beautiful her room looks. Her father then comes in to deliver her surprise, which turns out to be the puppy. Kayla appreciates her birthday party and thanks everyone for it, especially Fatty Bear, to whom she gives a big hug, ending the game.
After that, Fatty Bear helps Gretchen set up for Kayla's party by finding the letters for a "Happy Birthday" sign and blowing balloons in her bedroom. In the kitchen, the ingredients he found are used to bake a cake with the assistance of Matilda Rabbit. Then, using a bone and a ribbon he found, he lures the puppy back into her present box and ties it up. Finally, Fatty Bear jumps into Kayla's bed, going back to stuffed animal form before she wakes up. The next morning, Kayla awakens and announces that her room is beautiful. Her father comes to wish her a happy birthday and deliver her surprise, which turns out to be the puppy that rushes into the room and leaps onto her bed. Kayla thanks Fatty Bear for the best birthday she's ever had, giving him a big hug. Fatty Bear winks at the player and the credits roll.
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