When a man inadvertently makes Santa fall off his roof on Christmas Eve, he finds himself magically recruited to take his place.
Scott Calvin is disgusted to learn that his ex-wife, Laura, and her husband, Neil, have tried and failed to break it easy to their 6-year-old son, Charlie, that Santa Claus isn't real. On Christmas Eve, Scott reads "The Night Before Christmas" and then receives an unexpected visitor on his roof. When Santa is startled by Scott's calling out and falls off, he disappears, leaving only an 8-reindeer sleigh and a suit with instructions to put it on if he's involved in an accident. Scott does so and is transported around the town dropping gifts through chimneys until he's taken to the North Pole and informed by a group, who claim they're elves, that he is now Santa. Charlie is proud of Scott's new job, though he's convinced it was a dream. Then his hair turns white, his beard refuses to stay shaved, he gains weight inexplicably, and he has a sudden love of junk food. Now he's accepted it, there's just one problem: how to keep it a secret from his disbelieving family.
37 years old Scott Calvin, the marketing director of a Lakeside, Illinois-based toy company, gets ready to spend Christmas Eve with his son Charlie, who is eight years old. Scott wants Charlie to continue believing in Santa Claus even though he does not believe in him. At a young age, Scott's ex-wife Laura and her psychiatrist husband Dr. Neal Miller gave up on Santa, and they believe it is time for Charlie to follow suit.
A noise on the roof wakes Scott and Charlie up the night after they spend an evening at Denny's (after Scott unintentionally burns the dinner at home). Scott startles Santa Claus while he is investigating, and he dies after falling off the roof. Santa's body disappears, leaving behind a red suit and a business card that says that the reindeer will know what to do if something were to happen to him if someone puts on the suit. Santa's sleigh and reindeer are discovered on the roof by Scott and Charlie. Before the reindeer carry the gifts to the North Pole, Scott spends the remainder of the night delivering them after grudgingly donning the suit at Charlie's request.
By wearing the suit, Scott has, as it turns out, accepted all of the late Santa's obligations and responsibilities and is therefore subject to a legal technicality known as "the Santa Clause." Scott has eleven months to organize his affairs before returning to the North Pole on Thanksgiving, according to Bernard, the head elf. Scott, overcome with emotion, puts on the given pajamas and goes to sleep. Scott thinks the previous events were a dream when he wakes up in his own bed the following morning, but he also notices that he is still wearing the pajamas that were given to him. Laura, Neal, and the school staff are concerned because Charlie is proud that his father is the new Santa Claus. Scott asks Charlie not to tell anyone about their trip to the North Pole because he does not want to ruin his newly discovered excitement.
Over the course of the following year, Scott experiences a significant transformation; he puts on a significant amount of weight and grows more fond of sweets, especially cookies and milk. In addition, he grows a white beard that grows back right away after shaving, and despite his best efforts to dye it, his hair turns white. When his company proposes to use Santa riding a toy military tank to promote it, Scott becomes enraged. Additionally, when Scott sees "naughty" or "nice" kids, he starts to name them. Scott's visitation rights are suspended after Laura and Neal persuade a judge that he poses a risk to Charlie's welfare after they see kids attempting to sit on his lap during Charlie's soccer match.
A distraught Scott visits Laura and Neal's home for a final visit with Charlie on Thanksgiving. In an attempt to convince Scott that he is indeed Santa, Charlie shows him a magical snow globe that Bernard gave him because he is desperate to show him how important he is to the world's children. Bernard shows up and takes them both to the North Pole after Laura and Neal give Scott a minute to speak with Charlie alone. Laura and Neal call the police because they believe Scott has abducted Charlie.
Scott and Charlie head out to deliver gifts. Scott is arrested when he gets to Laura and Neal's house, and Charlie waits for him in the sleigh. Eventually, the elves free him from prison. Charlie is brought back to his home by Scott, who demands that he spend Christmas Eve with Laura and Neal. Laura and Neal are persuaded that he is Santa by his sincere speech to Charlie about the value of every member of the family. Laura tells him he is welcome to come at any time and burns the suspension documents. Bernard claims that Charlie's father will show up whenever he shakes his snow globe. Scott gives Laura and Neal the two gifts they never received as kids, which led to their disbelief in Santa, before departing. He identifies himself to the police and other witnesses outside the house by taking off from the roof. Charlie calls Scott back with the snow globe after he leaves, and Laura consents to let them ride in the sleigh together to complete the gift-giving.
