Act I
A narrator notes that wishes are more important than life itself to three sets of characters: Cinderella, who wishes to attend the King's festival; Jack, a lonely, impoverished and simple young man who wishes that his cow, Milky-White, would give milk; and the Baker and his Wife, who wish they could have a child. Little Red Ridinghood buys some bread from the Baker to take to her grandmother in the woods. An ugly old Witch reveals that the Baker's father had stolen from the Witch's garden to feed his pregnant wife, taking some of her magic beans. The Witch cursed the family, making them unable to have children, and taken the Baker's sister Rapunzel. The curse will be lifted if the Baker and his Wife can find the four ingredients that the Witch needs for a certain potion: "the cow as white as milk, the cape as red as blood, the hair as yellow as corn, and the slipper as pure as gold", all within the next three days ("Prologue").

All begin journeys into the woods: Jack's mother sends a reluctant Jack to sell his beloved Milky-White and encounters a Mysterious Man who says he'd be lucky to trade her for some beans, while Cinderella decides to escape to the festival, first visiting her mother's grave and receiving a beautiful gown and shoes from her mother's spirit ("Cinderella at the Grave"). Little Red Ridinghood goes to her grandmother's house and is stalked by a hungry and lusty wolf along the way ("Hello, Little Girl"). The Baker and his Wife con the sad Jack into selling Milky-White ("I Guess This Is Goodbye") for five beans that the Baker's father had stolen from the Witch, telling Jack that they're magic (not knowing that they really are). The Baker sends his Wife home with the cow and discourages her from returning to the woods ("Maybe They're Magic"). The Witch has locked Rapunzel, who has hair "as yellow as corn", in a tower to shield her from the outside world ("Our Little World"), but a Prince spies on them and decided to ask Rapunzel to let her hair down for him the next day. When Little Red Ridinghood arrives at her grandmother's house, she is swallowed by the Wolf, who has also feasted on her grandmother. The Baker (who has been following her) slays the Wolf, pulling Little Red Ridinghood and her grandmother from the beast's innards, and Red rewards him with the red cape ("I Know Things Now"). Jack's mother is angry that Jack was duped, returning only with beans, and tosses them aside, not knowing they will grow into a beanstalk that reaches into the clouds. Cinderella leaves the festival before the "First Midnight".

The Baker's Wife spots Cinderella's pure gold slippers, but she is also taken with Cinderella's Prince ("A Very Nice Prince"), until Milky-White runs away. Jack, meanwhile, returns from the giant's home with five gold coins, hoping to buy back Milky-White ("Giants in the Sky"). The Wife confesses that she has lost the cow to the Baker, who is angry and tells her to stay home. Cinderella's and Rapunzel's Princes sing of their endless longing ("Agony"). The Baker's Wife fools Rapunzel into letting down her hair and steals a piece. The Mysterious Man appears and gives Milky-White back to the Baker and his wife, who now have three of the four items. The Baker realizes that his Wife has helped considerably, and admits the need for them to join together in their quest ("It Takes Two").

Jack then arrives with a hen that lays golden eggs and attempts to buy Milky-White back, but she has died. The Baker's Wife meets Cinderella again, and almost succeeds in getting one of her shoes. As the second midnight arrives, the Witch discovers that the Prince has been visiting Rapunzel and begs Rapunzel to return to her ("Stay with Me"). The Witch angrily cuts off Rapunzel's hair and banishes her to a desert, and her Prince is blinded while trying to escape from the Witch. The Mysterious Man gives the Baker money to buy another cow, and Jack, convinced by the sarcastic Little Red Ridinghood, who now has a new wolfskin cape and a knife for protection, returns once again to the Giant's home to steal a magical harp.

Cinderella's Prince is giving another festival and spreads pitch on the stairs to try to capture and identify her, but she escapes and leaves one of her slippers as a clue to her identity ("On the Steps of the Palace"). The Baker's Wife arrives and attempts to trade her remaining bean for Cinderella's one remaining slipper; Cinderella throws the bean aside but, needing two shoes, trades shoes with the Wife and flees. The Baker arrives, and they have now found all four items sought by the Witch before the end of the third day. Jack's mother reports that a Giant has fallen from the beanstalk and is dead. As the third midnight approaches, the Witch discovers that the new cow is not pure white—it has only been covered with flour. However, the Witch revives Milky-White, and the items are fed to her by the Baker and his Wife. Jack milks her, but when he turns the goblet upside down, he reveals that it is empty. The Baker's wife reveals that she plucked the hair from Rapunzel. The Witch furiously explains that the magic will not work because the Witch had touched Rapunzel's hair that they had used in the potion, and she cannot have touched any of the ingredients. The Mysterious Man appears and tells the Baker to feed the hair-like strands on the ear of corn to the cow. Now Milky-White gives milk, and the new potion works. The Witch explains that the Mysterious Man is the Baker's father, who had abandoned him instead of being "killed in a baking accident", but the Man dies before the Baker can talk to him. The curse is broken, and the Witch becomes youthful and beautiful, although she loses her magical powers.

Cinderella's Prince searches for the maiden whose foot will fit the golden slipper. The stepsisters mutilate their feet trying to cram them into the slipper, but the prince finds Cinderella, whose foot fits the slipper, and she becomes the Prince's bride. At the wedding, the stepsisters are blinded by birds as they try to win Cinderella's favor. Rapunzel bears twins, finds her Prince and restores his vision with her tears. The Baker's Wife becomes pregnant. Everyone congratulates themselves on being able to live happily "Ever After", though they fail to notice another beanstalk growing from the final bean Cinderella threw away.

Act II
Once upon a time, later, in the same far-off kingdom, everyone is living happily despite some minor inconveniences: the Baker and his Wife have their precious baby boy, Jack and his mother are rich and well-fed, and Cinderella is living with her Prince Charming in the Palace ("So Happy").

Suddenly, everyone in the Kingdom is knocked over by an enormous crash, and enormous footprints have destroyed the Baker's home and the Witch's garden, sparing only a few beans. The Baker and his Wife decide that they must tell the Royal Family, although the Witch says that the Royal Family can't do anything about it, and they safely escort Little Red Ridinghood to her grandmother's house after her mother was killed by the Giant. Jack decides that he must slay the Giant (as he knows how, from his previous experiences), and Cinderella learns from her bird friends that her mother's grave was disturbed and decides to investigate. While everyone else is drawn back into the woods to deal with the threat from the vengeful Giantess, the two Princes have grown bored with their marriages and now lust after two new princesses: Snow White and Sleeping Beauty ("Agony" Reprise). Rapunzel, overcome with post-partum depression, becomes hysterical, and flees from the Witch.

The Baker, his Wife and Little Red get lost in the Woods and find the Witch, and the Royal Family and their Steward, who reveal that the castle was destroyed by the Giant. The Giant then appears, and everyone realizes that this Giantess is the widow of the Giant that Jack killed by chopping down the beanstalk, and she wants to kill Jack in revenge. To satisfy the Giantess, everyone offers her the narrator as a sacrifice, until they realize how lost they would be without him. Nevertheless, the Witch throws him into the Giant's arms and he is killed. Jack's mother finds the group and aggressively defends her son, angering the Giant's widow, and the Steward clubs Jack's mother to make her be quiet, inadvertently killing her. The Giantess leaves to search for Jack, and Rapunzel runs underneath her and is trampled, to the horror of the Witch and her Prince ("Witch's Lament").

The Royal Family leaves to hide in a Hidden Kingdom, the Witch decides to sacrifice Jack to the Giantess, and the Baker and his Wife decide they must find him first and split up to search. While Cinderella's Prince seduces the Baker's Wife ("Any Moment"), the Baker finds Cinderella and convinces her to join their group for safety. The Baker's Wife realizes her error and decides to return to her happy life with the Baker and their son ("Moments in the Woods") just moments before being accidentally crushed by the angry Giantess. The Witch finds Jack, who had found the Baker's Wife's body, and wants to give him to the Giantess, causing an argument—the characters first blame each other for their predicament, until they all blame the Witch together ("Your Fault"). Disgusted, the Witch purposefully throws away the rest of her magic beans, reactivating her mother's curse and making her vanish ("Last Midnight"). The Baker, grieving after his Wife's death, leaves his child with the others and is visited by his father's spirit, which convinces him to face his responsibilities ("No More").

The Baker returns to the group and helps them plan to kill the Giantess, using Cinderella's bird friends to peck out the Giant's eyes at an area smeared with pitch, where Jack and the Baker can finally deliver a fatal blow. Cinderella, after leaving her unfaithful Prince, helps comfort Little Red Ridinghood upon realizing that her grandmother has been killed by the Giantess as well, while the Baker explains to Jack his inability to say what is really morally correct ("No One Is Alone"). Everyone helps to slay the Giantess, and each of the previously deceased characters returns to describe the lesson they learned. The Baker's Wife returns (in the form of a spirit) to give him one final lesson: tell their child the story of the Woods—actions have consequences, even for future generations. The Baker becomes the Narrator of the tale, and all the characters seem satisfied, except for a final "I wish" from Cinderella ("Finale: Children Will Listen").