Wally Walrus is a day sleeper and requires daily rest while his neighbor in the adjacent apartment, Woody Woodpecker, is a night sleeper who does his chores during the day. Needless to say, Woody's noisy chores tend to keep the hapless Wally from getting any slumber particularly when he burns his leaves in the backyard, the smoke from the burning pile travelling into Wally's room eventually turning the pipes in his bed into a musical organ! But Wally gets the last laugh...
The 1890s; a picnic in the park. A man is pitching woo to his girl, while behind them a steady stream of ants is methodically devouring and carting off their food. Some other interludes include four ants eating Russian rye bread, then breaking for a Russian dance; a torch singer that sends everyone scurrying for some kind of ear plugs; a chef ant that coordinates the creation of three sandwiches that the humans eat.
Two polite twin gophers raid a vegetable patch guarded by a rather smug dog, whose various unsuccessful schemes to nullify the crafty and modest gophers involve a female gopher disguise, a hand grenade, and a carrot stuffed with TNT.
Driving down a U.S. highway, Woody Woodpecker passes a billboard which reminds him that he should renew his driver's license. He heads to the Department of Motor Vehicles and asks Officer Wally Walrus, who takes an immediate dislike to Woody, to give him the test. He puts Woody through the eye test, the reflex test, and the fingerprint test...with Woody constantly making short work of the walrus' patience.
Take-off on the "Duffy's Tavern" radio program, with tough-guy Eddie G. Robincat demanding a meal of mouse knuckles, "of which we ain't got none," waiter Filligan informs his absentee boss on the phone. To fill the plate, Filligan then tries to catch the blabbermouth mouse, Sniffles.
A newspaper announces that Ivan Awfulitch, the famous ambassador, is due to have a barbecue with local resident Wally Walrus. Unfortunately, while Wally is preparing the barbecue, the scent of the steaks he is cooking attracts an unwelcome guest in the form of Woody Woodpecker. He steals some of the food through a knothole in the fence then uses a bow and arrow to get the rest.
When war is announced, all the forest animals, birds and bugs go into manufacturing of armaments, helmets and the like, with an annoying jingle about the country's instruction to step up production musically repeated.
Sniffles the mouse's non-stop talking foils both the burglar and a tipsy Officer Bear, who's trying to sneak past his rolling pin-toting, sleepwalking wife.
Out hunting in the jungle with his spear, African native boy Inki keeps narrowly missing his prey: a parrot, a giraffe, even a butterfly. Then there's that weird black bird with the syncopated hop who keeps popping up out of nowhere, only to disappear mysteriously once again. Back to big game hunting, Inki puts his ear to the ground, not noticing the ferocious lion sneaking up on him.
Porky Pig is tapped for a giant-killing expedition. When the expedition reaches the giant's castle (which is normal sized, requiring the giant to stoop), everyone but Porky runs at the first sign of trouble, leaving Porky alone to awaken the giant's sleeping baby. Porky then must soothe the baby back to sleep and attempt his escape.
A conductor, in silhouette against sheet music, leads the title tune, which dissolves into a series of placid landscapes. As the music picks up, we see a water wheel, then a dancing fairy emerges from a whirlpool and begins singing, to the delight of small woodland creatures. The birds awaken sleeping cherubs, who begin their work of harvesting all things blue and adding them to the river. The birds even do their part, harvesting the color blue from the rainbow. Everyone tugs to open a floodgate and unleash the cerulean waters. A swan, festively decorated, leads a gondola of sorts lit by fireflies.