Timm Thaler is a poor boy who laughs loud and often. His laughter is so contagious that the rich and naughty Baron wants to have it, so he offers Timm to sell him his laughter in exchange for the power to make his every wish come true. After initial hesitation, the boy signs a contract with Baron. Timm can now make all his wishes come true, but he soon begins to realise that without his laughter he is becoming quite a different, lonely person. His friends Ida and Kreschimir join Timm on an adventure of helping him bring his laughter back. In his first film for children, the famous German director Andreas Dresen adapted a 1962 novel by James Kruss.