Hoppity the Grasshopper, after a period spent away, returns to an American city (Manhattan, New York City). He finds that all is not as he left it, and his insect friends,who live in the "Lowlands" just outside of the garden of a cute bungalow belonging to down-on-his-luck songwriter Dick Dickens and his wife Mary, are now under threat from the "human ones," who are trampling through the broken-down fence, using it as a shortcut.
Insect houses are being flattened and burned by cast away cigar butts. Old Mr. Bumble and his beautiful daughter Honey (Hoppity's sweetheart) are in grave danger of losing their Honey Shop to this threat. To compound their problems, devious insect "property magnate" C. Bagley Beetle has romantic designs on Honey Bee himself, and, with the help of his henchmen Swat the Fly and Smack the Mosquito, hatches plans to make Honey marry him or eliminate Hoppity as a romantic rival.
Hoppity discovers that the songwriter and his wife are waiting for a "check thing" from the Famous Music publishing company for the songwriter's composition, "We're the Couple in the Castle." With this money they can repair the fence, saving the bug community. But C. Bagley Beetle and his henchmen intercept and hide the check, and the Dickens house is foreclosed. Days pass, and with nothing improved, nearly everyone in the lowlands loses faith in Hoppity's claim. Mr. Beetle discovers that a skyscraper will be built on the site, destroying both the Lowlands and his own property. He schemes to "gift" the other bugs his soon-to-be worthless property on the condition that Honey marry him. When he realizes that Hoppity was nearby and overheard him, he seals Hoppity inside the envelope that the Dickens' check came in, hiding it in a crack in a wall.
Construction begins while everyone is at the wedding of Beetle and Honey; a weight from a surveyor's level that rips through the chapel causes the terrified bugs to flee back to the Lowlands, not realizing that their own homes are endangered by the construction crew. Hoppity escapes when the construction crew demolishes the wall, freeing the envelope. Hoppity comes to Honey's rescue, battles Beetle and his henchmen, and wins.
Hoppity tells everyone what happened and manages to get the check to Mr. Dickens. "We're the Couple in the Castle" becomes a massive hit. Meanwhile, Hoppity leads an exodus from the Lowlands to the top of the skyscraper, where he believes the Dickens' have built a new home and invited the bugs to live there. They get to the top, which at first appears to be barren, but the young bugs discover the Dickens have built a new penthouse with a "Garden of Paradise" just as Hoppity had described. Honey and the rest of the Lowlanders live there happily ever after in their new home. And as Ambrose looks over the edge, he remarks, "Look at all the human ones down there. They look just like a lot of little bugs!"