Lyrics:

Act I - The Upstairs Nursery of the Darling Home in London

As Mr. and Mrs. Darling prepare to go out for the evening, they come and say goodnight to their children, Wendy, Michael and John. Mr. Darling wonders if having a dog for a nanny is such a good idea. Mrs. Darling defends poor Nana, the children's dog and nursemaid, who has been very nervous of late. One night last week, while the children slept, Nana saw a young boy appear in the middle of the room, but before she could catch him, he flew out the window. She was, however, able to grab his shadow which Mrs. Darling tucked away in a dresser drawer. While Mr. Darling acknowledges that Nana has done some good, he insists that she spend the night downstairs. Nana, barking her protests, is taken from the room by Liza, the children's maid. When things have calmed down, Mrs. Darling and her children sing a lullaby

Once the children are asleep a fairy, Tinker Bell, and Peter Pan Musical fly in through the window. Tinker Bell shows Peter where his shadow is hidden. Peter despairs when he can't get his shadow to stick and begins to cry. Wendy wakes up and asks him: Boy, why are you crying? When he tells her, she offers to sew his shadow back on to him. Peter delights in his newly attached shadow. He then tells Wendy about the fairies and how they are dying. It seems that every time a child says he or she does not believe in fairies, one more fairy dies. Wendy asks Peter where he comes from, and Peter replies Never-Never-Land. Michael and John wake up. Suddenly, Nana and Liza, having heard noises upstairs, come in to check on the children. Peter and Tinker Bell hide while the children pretend to be asleep. After they leave, Peter invites Wendy and the boys to come with him to Never-Never-Land, and they all heartily accept. There is just one problem. How will they get there? Peter's solution is easy. He throws fairy dust on them and, telling them to think lovely thoughts, he teaches them to fly

Act II - Never Land

Outside their underground hideout the Lost Boys wonder when Peter will return. Suddenly they scream in fear as Captain Hook and his pirates attempt to capture them. The Boys scatter and hide. Hook is out to kill Peter, for he is the one who cut off Hook's hand and threw it to a crocodile, who now follows him about hoping for more. By chance, Hook discovers the Boys's underground hideout and now summons Smee to provide the appropriate music to devise a plan for the Boys' demise. Suddenly, Hook hears the loud tick-tock of the crocodile, which has swallowed a large clock, thereby warning Hook that he is on his way. Hook and his men flee. The Boys are now safe, but not for long. Out of nowhere Indians, headed by Tiger Lily approach. Leaving the Boys alone, the Indians continue on their way through the forest, looking for the Pirates

Seeing a strange bird in the sky the Boys shoot it down with bow and arrow. When Peter, Michael and John land, they are distressed to see dear Wendy with an arrow in her heart. Wendy is not dead. However, until she's well enough to move into the underground hideout the Boys build a house around her in the hopes that she'll be their mother

Hook is so furious that the Boys have found a mother that he develops a plan to kidnap Wendy and kill the Boys. The next day the Pirates have captured Tiger Lily and tied her to a tree. While hiding nearby, Peter imitates the Captain and orders the men to set Tiger Lily free. The real Captain shows up and is enraged at the discovery that his prisoner has been released. Who or what has set Tiger Lily free? Hook speaks out to this strange Spirit of the Forest and Peter, still hiding, is only too happy to oblige. He converses with Hook using different voices. Peter's triumph is short lived, for he is unmasked by Hook. Peter and Tiger Lily escape the clutches of the dastardly Hook

Later in the underground house the Boys are effusive in their love for Wendy. Only a jealous Tinker Bell wishes Wendy would leave. Peter and Tiger Lily rush in from their chase. Together they smoke a peace pipe and vow eternal friendship. Tiger Lily and the Indians leave to stand guard against Hook and his men, above ground at the entrance to the house. Wendy asks Peter to sing the Boys a lullaby. Listening to the lullaby Michael and John long to return home. Wendy confesses that she too is homesick. She asks Peter if they can fly home. The Lost Boys wish they had parents and Wendy offers hers to all of them. Everyone is excited at the prospect of being adopted, except Peter. He says he won't go. Wendy, seeing how sad he is, assures him that she'll come back once a year for spring cleaning

Just then, the Pirates attack and subdue Tiger Lily and the Indians. Under the impression that the Indians have beaten the Pirates (from a secret signal that Peter and Tiger Lily had set up), Peter sends Wendy and all the Boys on their way. Before she leaves