The evil wizard king Winterbolt has caused havoc upon the people who have entered his domain. He is then punished by Lady Boreal when she places a spell on him that puts him in a deep sleep. Years later, Winterbolt awakens and in her final act of magic, Boreal transfers the last of her power into Rudolph's red nose, which will stop glowing if it is ever used for evil. Winterbolt learns of this through his "genie of the ice scepter" and plans not only to dispose of Rudolph, the only power capable of stopping him, but also to reclaim his territory from Santa Claus. To achieve this, Winterbolt plans to take advantage of Frosty and his family. At the same time, an ice cream man named Milton arrives and tells Rudolph and Frosty that he plans to attract the heart of his girlfriend, the high-wire act, Lainie Loraine. Rudolph and Frosty are left to team up at the annual 4th of July parade to stop Winterbolt.
Jackie Vernon and Shelley Winters reprised their roles as Frosty the Snowman and his wife Crystal, Billie Mae Richards once again provided the voice of Rudolph the Red-Nosed Reindeer and Mickey Rooney provided the voice of Santa Claus once more. Paul Frees, Red Buttons and Ethel Merman also provide voices. This would be the last special to star Billie Mae Richards and Jackie Vernon as the voices of Rudolph and Frosty respectively, as well as Mickey Rooney as the voice of Santa until 2008's A Miser Brothers' Christmas.