Peter Pan and the other inhabitants of Neverland open the show by introducing the audience to their world (“Neverland”). Meanwhile, in the Darling Nursery (“Prologue”), Wendy, Michael, and John are playing before bed as Mrs.Darling and Mr.Darling get ready to go out. Nana, the family dog, and Liza encourage the children to go to bed. Before leaving, Mrs. Darling sings a lullaby with the children to say goodnight (“Tender Shepherd”). As soon as the parents have gone, Peter follows Tinker Bell into the room, searching for Peter’s shadow. Wendy is awakened by the commotion and quickly befriends the mysterious visitor. The Darling children soon set off to Neverland with Peter, travelling the only way possible (“I’m Flying”).
Back in Neverland, the Pirates search for the Lost Boys (“Pirate March”). After discovering the Lost Boys’ underground home, Captain Hook and his first mate Smee devise a plan (“Hook’s Tango”), but is chased away by the Crocodile. The Lost Boys remain in peril as the Brave Girls, led by Tiger Lily, arrive on the scene (“Brave Girl Dance”). Peter and the Darlings reach Neverland, frightening the Brave Girls. Finally safe, the Lost Boys celebrate the arrival of their new “mother” (“Wendy”). Captain Hook’s first attempt to poison the Lost Boys is thwarted by their new guardian, and the pirates must devise a new plan (“Hook’s Tarantella”).
The next day, the Lost Boys learn a lesson from Peter, their “father” (“I Won’t Grow Up”). When they discover that the pirates have captured Tiger Lily, the Lost Boys help to free her. She immediately returns the favor by saving the boys from Captain Hook, and the two groups celebrate their newfound friendship (“Ugh-A-Wug”). The Brave Girls stand guard outside the Lost Boys’ home while Wendy and Peter sing the boys to sleep (“Distant Melody”). The lullaby makes Michael and John homesick, and Wendy decides it is time for them to return to London. She agrees to take all the Lost Boys with them, but Peter decides he will remain in Neverland. Not knowing that the pirates have attacked and defeated the Brave Girls outside, Wendy leads the boys into a trap. Back in the house Tinker Bell saves Peter from being poisoned, and they set off to save the others.
On the deck of the pirate ship, Captain Hook celebrates his triumph (“Hook’s Waltz”). Before making the children walk the plank, Captain Hook allows Wendy a final word. The moment is interrupted by the tick-tock of the Crocodile. Taking advantage of the distraction, Peter and the Brave Girls sneak aboard the ship and, at just the right moment, attack the pirates. The day is saved and everyone celebrates (“I Gotta Crow”).
Back in the Darling Nursery, the Darlings and Nana miss the children terribly and are losing hope that they will ever return (“Nursery Music”). Wendy, Michael and John return home, and the Darlings agree to adopt the Lost Boys that have come along. Back in Neverland, Peter, the pirates, and the Brave Girls sing of Neverland, where dreams are born (“Finale Ultimo”).