The film takes place in one room and stars the toy of the title, a mechanical one-man band player named Tinny, and a baby named Billy. At first, Tinny is delighted at the prospect of being played with by Billy until he sees how clumsy the infant can be. When Tinny tries to walk out of Billy's reach, the musical instruments, which are on his back, play notes, and accidentally attract Billy's attention.
Tinny begins to run, but is chased by Billy. Tinny soon finds cover under the couch, only to find that many other toys have also hidden themselves from Billy there since they are also afraid of the baby, and are too terrified to come out, and have learned the same experience.
Unaware of this, while trying to seek out Tinny, Billy falls over, but lies peacefully on the floor, then begins to cry. Tinny, feeling sorry for the baby, goes to the child in an attempt to cheer him up. Upon seeing Tinny, Billy stops crying, cheers up, and grabs the toy to play with, but shakes him around for a few moments, and soon ignores him while being distracted by Tinny’s packaging.
Annoyed by this, Tinny follows Billy around the room whilst attempting to get his attention, but is still mad with the baby not listening. Still being ignored, he pursues Billy, who is instead even happier playing with boxes and a shopping bag while some toys come out from the couch to play.