On earth, human boy Brian becomes covered with colors after he walks right through a rainbow. Rainbow Brite had made it to try to cheer him up. In order to get the colors off Brian, she must take him to Rainbowland where no outsider has ever been. Meanwhile, bad guys Murky Dismal and Lurky kidnap the Color Kids in ransom for Rainbow Brite's Color Belt. Brian goes with Rainbow Brite, Twink, and Starlite to the Pits to help rescue them!
The origin story of Rainbow Brite begins! A little girl named Wisp is transported to a dark, colorless world. Her quest is to find the light and the color of this dark world and set it free. In order to make the darkness disappear, she must find the Sphere of Light. She runs into Twink (literally) and he tells her about "the evil one" who lives in the castle. On the way to the castle, Wisp and Twink meet Stalite and he tells them the legend of the Color Belt.
The second part of the origin story of Rainbow Brite. Starting in the cave where they found the Color Belt, Rainbow Brite, Twink, Starlite and the baby continue on Rainbow Brite's quest to find the light and color of the land and set it free. First they must find and rescue all seven Color Kids (Red Butler, Lala Orange, Canary Yellow, Patty O'Green, Buddy Blue, Indigo, and Shy Violet) then find the Sphere of Light. Can they do it and defeat the King of Shadows to bring color to the land?
A spaceship crash lands in Rainbowland right in front of the Color Castle. Out pops Wajah, a creature who gets his energy from color. Rainbow Brite and friends must work quickly to repair his spaceship before he absorbs all the color in Rainbowland! Meanwhile, Murky Dismal's new invention, the Gloom Transformer, turns star sprinkles into rain sprinkles. He also has his eye on kidnapping Wajah!
Murky Dismal kidnaps Moonglow to stop her from making the night beautiful. With Moonglow gone, Rainbowland and the earth have no stars in the night sky. It's up to Rainbow Brite and her friends to rescue her.
While everyone in Rainbowland is preparing for the Color Festival Parade, Sorrell the Sorcerer crashes in the Pits. Murky Dismal asks him to destroy the Color Cave and in return he'll supply Sorrell the Sorcerer with the parts he needs to fix his space ship. They hatch a scheme to create a comet to destroy the Color Cave.
It's the Sprite Fair and almost time for the big horse race. Murky Dismal makes a robotic horse to enter the race so he can spread a cloud of gloom all over the track in order to kidnap Starlite. That way, when Rainbow Brite goes to rescue Starlite, he can fill Rainbowland with gloom.
When the sprites venture far back in the Color Cave, they discover the Princess and Count Blogg (from Rainbow Brite and the Star Stealer (1985)). The Princess tells them she's the queen of the sprites and her "diamond finder" indicated there were diamonds in the Color Cave. She demands the sprites dig for them so she can get enough to re-energize her "magic stone." With that done, she can get her power back and "do something about that nasty little girl who destroyed" it. With the colors fading all over Rainbowland, Rainbow Brite must defeat the Princess once again!