There are two segments in the film, both loosely based upon popular works of literature:
The adventures of Mr. Toad, based on Kenneth Grahame's The Wind in the Willows. In this story, the charismatic J. Thaddeus Toad, Esq., is the happy-go-lucky, wealthy proprietor of Toad Hall. Toad believes in fun, adventure and travelling to "Nowhere in Particular"; He has built a great deal of debt from disregarding the financial responsibilities of his insatiable love for transportation vehicles, such as gypsy carts and (subsequently) the newfangled motor car. His friends Ratty (Water Rat), Moley (Mole) and Angus MacBadger, try to help him when his mania leads to the loss of the deed to Toad Hall, and a charge of car theft.
The story of Ichabod Crane and the Headless Horseman, based on Washington Irving's The Legend of Sleepy Hollow. The gangly and lanky Ichabod Crane is the new schoolmaster in Sleepy Hollow. His somewhat odd behavior makes him the ridicule of the rambunctious and robust town bully Brom Bones. Despite his odd appearance, Ichabod quickly proves to be a ladies' man charming all the eligible local ladies. Finally, however, Ichabod discovers the local town beauty, Katrina Van Tassel. Katrina is the beautiful young daughter of wealthy farmer Baltus Van Tassel, and Broms' intended.