The nefarious pirate Captain Hook found a map to Neverland's hidden treasure and intends to plunder it. Since he now knows where the treasure is located he hacks up the treasure map to pieces and scatters the pieces throughout Neverland so no one else will be able to locate the treasure. Meanwhile, the fairy Tinkerbell informs Peter Pan that there is a treasure somewhere in Neverland. So now Peter Pan and Tinkerbell are on a quest to locate the hidden treasure too by finding and putting back together the pieces of the sliced up treasure map.
Players take the role of Peter Pan and occasionally as Tinker Bell throughout 20 different stages. Some of the stages include Hangman's Tree, the Mermaid Lagoon, Pirate's Cove, Indian village, and Skull Rock.
Peter's has the ability to fly and he can use a knife, as well as bombs, against his enemies such as seagulls and pirates, not to mention boss enemies such as Hook's first mate, Mr. Smee, and of course Captain Hook himself. Throughout these stages players can collect items such as feathers and film reels.
In stages where players take control of Tinkerbell, they have to fly throughout the stage keeping a torch lit while avoiding obstacles that would put the torch out.
In between stages players can visit the Indian shop where they can spend their feathers and buy things such as pixie dust, tips, and a health boost.
Also players can use the film reels they found and view the actual clips from the animated feature film the game is named after.