Timmy gets up in the morning and wishes he can be zapped to school like always. Mr. Crocker tells the class to write a magical story about their lives that is true, and if it is not true they fail. By making this assignment, Mr. Crocker wants Timmy to admit he has fairy godparents. Timmy writes a story about his everyday life but does not include any magic or fairies. He gets an F.

Then Timmy goes home and wishes for a new Crash Nebula video game. All of the electricity goes out in the whole town except Timmy's house. Then, Chester and AJ come to Timmy's house and they play the virtual reality video game. Mr. Crocker sees every house with no light except one, so he goes to see if there are fairy godparents there. Mr. Crocker realizes that it is Timmy's house and spies on him. Chester and AJ go home and Cosmo and Wanda appear. Mr. Crocker sees the fairy godparents and videotapes them. Then he announces to Timmy that he has proof that fairies do exist, but before he finishes his sentence, Cosmo, Wanda, and Timmy disappear. They were sent to Fairy World by Jorgen, and he tells Timmy that he is in big trouble because someone found out about his fairy godparents.

Meanwhile, Mr. Crocker goes to the police station and shows the police his videotape. One of the police thinks that Mr. Crocker was using camera tricks, but one of the other policemen tells him that he is crazy, and is not smart enough to do camera tricks. They go to Timmy's house to investigate. The police ring the bell and Timmy's parents answer the door. The police ask where Timmy Turner is, and his parents say he is in his room. They search his room but do not find Timmy anywhere. Timmy's parents get nervous, and call search parties to look for Timmy. They think he might have run away since they always leave him with Vicky the babysitter. The police go to everyone's houses but Timmy is nowhere. Mr. Crocker keeps telling the police that his videotape is real and that Timmy disappeared. After a few hours, the police give up and believe Mr. Crocker. Timmy having fairy godparents is soon on TV, the radio, the Internet, and newspapers. Soon everyone in the whole world knows about the fairy godparents.

Meanwhile, Timmy is on trial at Fairy World. Timmy tries to apologize, but Jorgen cannot stop the whole world from knowing about fairy godparents. He says Timmy cannot have his fairy godparents anymore, and in one week Timmy will lose his memory and not remember he had fairy godparents. Cosmo and Wanda tell Timmy they will try to convince Jorgen to change his mind, but then Timmy is sent back to his house.

He appears right in front of his parents. His parents are happy to see him, and he tells them what happened. They say that they will spend more time with him and not leave him with the babysitter anymore. Then they go outside to tell the police Timmy is safe. Then, Chester and AJ go to Timmy's house and want to know why Timmy never told them. Timmy explains, and then asks them for help to get his fairy godparents back. He gets an idea.

Timmy writes down ten questions that if someone answers yes to all of them, they probably have fairy godparents. Timmy, Chester, and AJ split up and ask every kid in town these questions. People crowd around Timmy in the streets, but Chester pushes them away with his braces. The kids ask Timmy if he is the kid with fairy godparents, but he lies and says no. After a long time, Chester and AJ tell Timmy they are going home and will help again in the morning. Timmy will continue by himself, but Mr. Crocker stops him.

Mr. Crocker wants to know where his fairy godparents are. Timmy tells him that it is his fault that he will never see them again. He says "I will never see them again," and this sentence repeats in Mr. Crocker's head. He all of a sudden has a memory strike, and suddenly remembers that he had fairy godparents as a child. When he grew up, his fairy godparents had to leave, and he said that sentence, "I will never see them again." Then he lost his memory. Mr. Crocker feels bad for Timmy, and decides to help him.

He gets hundreds of people to go around the world and ask the ten questions. They only have one week though, because then Timmy will lose his memory like Mr. Crocker did. There are only two days left, and Timmy has twenty suspects. He e-mails them and asks them to go to his house and wish he were in Fairy World.

The next day, one kid comes and admits he has fairy godparents to Timmy, Chester, AJ, and Mr. Crocker. The kid wishes himself and Timmy into Fairy World, and Jorgen goes right over to them. He thinks Timmy is getting every kid with fairy godparents to tell everyone they have them, and brings Timmy and the kid to another trial. Timmy tells Jorgen the kid is innocent, and that he is sorry. He wants his fairy godparents again. Jorgen is about to make Timmy lose his memory when Cosmo and Wanda come with a petition signed with a million names of fairies who want Timmy to have his fairy godparents again. Cosmo and Wanda promised the fairies new wands if they did this. They all crowd around Jorgen, and he finally agrees to let Timmy have his fairy godparents again in fear of being overthrown by the fairies.

Timmy says that fairy godparents do not have to be a secret. Everyone should know there is magic in the world, and if they have wishes, kids with fairy godparents can decide if they deserve to have their wish granted or not. Jorgen says that is a good idea, and he will allow that only if Timmy does community service for Fairy World every week. Timmy, Cosmo, Wanda, the kid, and his fairy godparents go to earth, and everyone greets the fairies. Mr. Crocker's fairies go over to Mr. Crocker to say hi. Timmy's parents introduce themselves to Cosmo and Wanda, and they say that they will have a family dinner with Timmy, Cosmo, and Wanda. Then they give Timmy a present, an extreme sports Lego kit.

They are at their house, and Timmy wishes he were the size of a Lego person. He skateboards and snowboards on the Lego ramps and mountains with the Lego skateboard and snowboard. Chester and AJ come over to watch and play Lego also. Then Timmy wishes himself to his real size again and he is happy that Cosmo and Wanda are always going to be there for him. He is also happy that now he can share his wishes with his friends and family, and can spend more time with his family. Even Mr. Crocker is happy that he got to see his fairy godparents again. They all live happily ever after