Twelve-year-old Bea moves into her grandmother Margaret’s New York apartment while her father awaits heart surgery in the same hospital where her mother died years earlier. One night, Bea encounters a strange creature and follows it back to her grandmother’s building.

The next day, she sees the creature again with a man named Cal, who retrieves a large furry purple being named Blue. Bea faints upon meeting another creature, a butterfly-like being named Blossom. Cal explains that he works with imaginary friends (IFs) to place them with new children since their original kids have grown up. Initially hesitant, Bea decides to help Cal.

Cal takes Bea to Memory Lane Retirement Home, a place for retired IFs under a Coney Island swing ride. Lewis, an elderly teddy bear and head of the facility, inspires Bea to redesign the place, despite Cal’s reservations. Bea tries to match an IF with Benjamin, a young hospital patient, but he can’t see them. Lewis suggests IFs might need to reunite with their original kids instead. Bea discovers Blossom was her grandmother’s IF and successfully reunites them.

Bea, Cal, and Blue find Blue’s original kid, Jeremy, now an adult, and help him remember Blue, boosting his confidence for a business presentation. Bea comforts her father during a medical scare by telling him a story, leading him to wake up. Bea realizes Cal is her forgotten childhood IF, Calvin, and thanks him, allowing her to see him and the IFs again. Bea’s father recovers, and they return home, where he reconnects with his own IF, Keith.