Belle and Prince Adam throw a Christmas party for the local villagers and Skunk and friends at their castle. Lumiere and Cogsworth argue who brought Christmas back to the castle, while Mrs. Potts insists of explaining the true story behind Christmas' return to the castle. The film then switches into a lengthy flashback, during the events of the first film after the Beast saved Belle from a wolf pack. Belle is excited for Christmas but is shocked when the castle servants reveal the Beast has forbidden Christmas from occurring. Belle finds the Beast outside in the snow and offers to teach him ice skating, but Fife, humble minion of Forte the court composer, who was transformed into a pipe organ, interrupts their skating, causing the Beast and Belle to crash into the snow, and when Belle makes a snow angel, the Beast see his angel as a shadow of a monster. He roars, swipes at some snow and storms off inside, leaving Belle, the animals and castle servants alone.
Belle decides to throw Christmas, Lumiere, Chip and the animals accompanying her to the castle attic where they meet Angelique, one of Lumiere's lovers who objects to the reintroduction of Christmas, due to the Beast's curse occurring on Christmas when he rejected the Enchantress entry into the castle. The Beast consults Forte, who prefers to remain in his new form than being returned to normal, enjoying his manipulation over the Beast's anger. The Beast confronts Belle and the animals in the castle's boiler room, but they come to blows over their argument over Christmas. Belle and the animals eventually meet Forte, who advises them to venture into the deepest part of the forest to cut down a giant Christmas tree. However, Belle finds the tree is near impossible to cut down and eventually falls under a sheet of ice. The Beast learns what has happened and goes to rescue her with Lumiere, Cogsworth, Fife, and carpenter Axe. However, knowing she was planning Christmas against his wishes, he imprisons Belle in the dungeon.
The servants and animals visit Belle, Angelique apologizing for her sarcastic attitude. The Beast finds a present, a storybook, from Belle and reads it. Moved by the book's words, the Beast has a change of heart and frees Belle, offering to celebrate Christmas after all. Forte is furious and uses his music in an attempt to destroy the castle. The Beast confronts Forte, but is overwhelmed by his music. Fife points out Forte's keyboard is his weak point, the Beast tossing it at Forte who collapses and dies. Belle, the Beast and the servants celebrate Christmas together. The film ends at the party, with Prince Adam taking Belle aside and giving her a rose as a Christmas present.