It's Christmas Eve, and the Glo Friends are decorating their homes, ice skating, and having fun in the snow. Shuttle Bug starts a snowball fight that ruins Granny's chestnuts, but Granny's in too good a mood to be mad. Instead she turns her attention to Baby Glo Worm and assures the little bug that Santa Claus is quite real and can always be counted on to make all his deliveries on time. Meanwhile, Santa has his own Christmas preparations to take care of. His anxious elves are frantically loading up the sleigh and trying to send him on his way. Santa laughingly brushes aside their anxiety about his being late, not realizing that he actually has reason to worry this year.
Blanche, the Wicked Witch of the North Pole, is sick of all the Christmas cheer and wants to steal the limelight for herself. Moose, a simple-minded klutz who wants to join the reindeer team, inadvertently gives Blanche the idea of kidnapping Santa Claus so that she can always be remembered as the witch who destroyed Christmas. The witch uses her magic ice wand to make the trees come alive and pull Santa and his flying reindeer into the river – she then creates an ice cage that traps them in the middle of the raging rapids. The good-hearted Moose is outraged by this but is too clumsy to stop Blanche. She then punishes Moose for his betrayal by catapulting him to a distant part of the forest.
Fortunately for Santa, Dragonflyer and Shuttle Bug see what happens and fly back to Glo Land to get help. Glo Worm immediately leads his friends on a rescue mission that is abruptly cut off by Blanche, who claims not to be worried about the Glo Friends yet still sends some cloud monsters to scare them. Fortunately, no one is hurt, so the rescue can continue despite the fact that Clutter Bug is scared of the forest. They'll have to hurry though, because the ice cage's ceiling (with its razor-sharp spikes) is slowly falling down on Santa and the reindeer.
The Glo Friends soon hear a cry for help that Book Bug identifies as either being a ghost or a large moose. Dragonflyer, Shuttle Bug, Glo Cricket, Slugger Bug, Bop Bug, Skunk Bug, and Book Bug go after the voice while Glo Worm, Bashful Bug, Clutter Bug, Prayer Bug, Doodle Bug, Cappy, Water Bug, and Garden Ant keep searching for Santa. Dragonflyer's group finds Moose up in a tree and helps him get down. As for Glo Worm's group, they all get caught in a flower trap set by Blanche. Fortunately, Moose speedily gets his group of Glo Friends to the flowers so that the captured bugs can be released. He then takes them to where Santa is being held.
Santa Claus is overjoyed to see the Glo Friends on the riverbank. Moose jumps the river to deposit the Glo Friends on the ice island, swimming back to shore when he realizes he's too heavy. With the cage ceiling nearly crushing its occupants, Glo Worm decides that they should melt the ice by joining hands and forming a Glo Circle. Unfortunately, they can't reach full strength since there aren't enough Glo Friends present to complete the circle. Suddenly Blanche appears and begins reciting a spell to get rid of the Glo Friends once and for all. What the witch doesn't realize is that Glo Turtle and Glo Hopper are directly beneath her and melting the ice block that she's standing on. Blanche falls into the rapids and drops her wand, which melts when Glo Hopper catches it. The two newly arrived Glo Friends then complete the Glo Circle and help the others melt the ice cage away. The grateful Santa Claus asks the Glo Friends to light the way on his Christmas run – he also asks Moose to lead the reindeer team out of the forest. The ecstatic rescuers readily agree, and Christmas goes on as scheduled.