On Christmas Eve, 1968, an orphaned baby Buddy crawls into Santa’s (Edward Asner) sack and accidentally ends up at the North Pole. Papa Elf (Bob Newhart), an honored member of Santa’s elves, is charged with raising the human baby. As it is physiologically impossible for elves to lie, they decide to simply never tell Buddy (Will Ferrell) of his true lineage so long as he never asks. As Buddy grows ever taller and larger, towering over his two-foot friends and family, the elves find it harder and harder to make Buddy feel like one of the gang. Ultimately, as Buddy grows frustrated by his ungainly size and clumsiness, Papa Elf decides to tell Buddy it’s not a "glandular problem" that sets him apart.
"It finally comes to pass that Papa Elf has to explain to Buddy that he’s not an elf; that he is, in fact, a human being," relates Bob Newhart. "He has to explain that Buddy’s mother put him up for adoption and then shortly after that passed away, but his biological father is alive and living in Manhattan."
With the cat now out of the bag, Buddy is determined to find his "real" father. Though never having before set foot outside the security of Santa’s magical compound in the North Pole, Buddy ventures south into the very real world of New York City.
Buddy is both daunted and enraptured by the cacophony of sights and sounds of the big city. More than just a fish out of water in his green elf suit, Buddy is intellectually and emotionally unprepared for humanity. He is a child by popular standards, naďve and socially inept, yet his charm is infectious. Edward Asner, who plays Santa Claus, describes Buddy as "pure as the driven snow. He’s a saintly creature. He has a heart as big as a pumpkin and seeks to do nothing but good. But he’s clumsy in executing that goodness. He’s a loveable oaf."
Will Ferrell, who created numerous memorable characters during his seven seasons as a cast member on NBC’s legendary series "Saturday Night Live," and who co-starred earlier this year in the comedy hit Old School, describes Buddy as having "no judgment of anything or anyone. He just accepts," says the actor. "Buddy is a good example of how ignorance is bliss. So, how others react to him is as much a comment on them as it is on Buddy. Some feel sorry for him, most find him annoying, but others just enjoy his total acceptance and wonder in something that seems so mundane, such as riding on an escalator for the first time. He’s a person who finds joy and interest in the smallest of things."
Buddy locates his father, Walter Hobbs (James Caan), at a mighty book publishing company in the Empire State Building. Walter is a bit of a tyrant who’s obsessed with profits as well as a bit of a slacker when it comes to quality control. Walter’s first response to Buddy is to rush for DNA testing; then, even after the test proves Buddy’s claims, Walter still rejects his son, partly because Walter barely has time for the family he already knows and partly because he finds Buddy’s perceived mental instability embarrassing. James Caan notes that Walter is not intentionally mean. "This guy is just involved in himself and his work," comments the acclaimed actor and Oscar nominee for The Godfather. "He has no clue about anything else because the way he sees it, everything is about him."
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