Hansel and Gretel are young children whose father is a woodcutter. When a great famine settles over the land, the woodcutter's abusive second wife decides to take the children into the woods. Her plan was to abandon the kids in the woods so that she and her husband will not starve to death. According to her it is mainly because the children eat too much. The woodcutter opposes the plan but finally and reluctantly submits to his wife's scheme. However, while talking about their plan, they are unaware that Hansel and Gretel have overheard them from the children's bedroom. After the parents have gone to bed, Hansel sneaks out of the house and gathers as many white pebbles as he can, then returns to his room, reassuring Gretel that God will not forsake them.
The next three days, the family walks deep into the woods and Hansel lays a trail of white pebbles. After their parents leave them, the children wait for the moon to rise before following the pebbles back home. They return home safely, much to their stepmother's horror. Once again provisions become scarce and the stepmother angrily orders her husband to take the children farther into the woods and leave them there to die. Hansel and Gretel attempt to leave the house to gather more pebbles, but find the doors locked and escape impossible.
The following morning, the family treks into the woods. Hansel takes a slice of bread and leaves a trail of bread crumbs to follow home. However, after they are once again abandoned, the children find that birds have eaten the crumbs and they are lost in the woods. After days of wandering, they follow a beautiful white bird to a clearing in the woods, where they discover a large cottage built of gingerbread and cakes with window panes of clear sugar. Hungry and tired, the children begin to eat the rooftop of the candy house, when the door opens. A hideous old hag emerges and lures them inside with the promise of soft beds and delicious food. Unaware that their hostess is a bloodthirsty witch who built the gingerbread house to lure children to her to cook and eat them, the children enter the house.
The following morning the witch locks Hansel in a cage, and forces Gretel into becoming a slave. The witch force-feeds Hansel regularly to fatten him up, but he cleverly offers a bone and the witch feels it, thinking it is his finger. Due to her blindness, she is fooled into thinking Hansel is still too thin to eat. After weeks of this, the witch grows impatient and decides to eat Hansel anyway.
The witch prepares the oven for Hansel, but decides to kill Gretel as well. She coaxes Gretel to open the oven and prods her to lean over in front of it to see if the fire is hot enough. Sensing the witch's intent, Gretel pretends that she does not understand what she is being told to do. Infuriated, the witch demonstrates and Gretel instantly shoves her into the oven and slams and bolts the door shut. Gretel frees Hansel from the cage and the pair discover a vase full of treasure and precious stones. Putting the jewels into their clothing, the children set off for home.
A swan ferries them across an expanse of water and at home they find their father; his wife died from unknown causes. With the witch's wealth that they found, they all live happily ever after.