Jesse, a high-spirited tomboy, and Goldy, the magnificent golden bear who becomes her very best friend, are polishing their circus act for Calhoun Corner's upcoming carnival. But Freedom (Mr. T), an animal-loving holy man, believes Goldy belongs back in the wilderness and away from those who might harm or exploit her. Master Borgia (Cheech Marin), a sly magician, tries to take Goldy away from Jesse, convinced the wondrous bear can help him make a comeback as a great illusionist. When he hypnotizes Jesse's Uncle Ned and makes him agree to sell the bear, Jesse and Goldy run away into the mountains. Freedom tries to persuade Jesse that Goldy is lonely for the company of another bear and that a perfect mate is waiting for her on the next mountain. Jesse must choose between holding onto Goldy and giving her a chance at a new kind of happiness.