Pac-Man, Mrs. Pac-Man, Baby Pac, Chomp-Chomp, and Sour Puss are all out enjoying a rare snowfall in Pac-Land - making 'Snow Ghosts', playing in the snow and enjoying quality family time together. The family then hops into their snowmobile to return home when find themselves being chased by the ghosts - Inky, Blinky, Pinky, Sue, and Clyde. The Pac family and the ghosts engage in a high-speed chase through the countryside until the mobile goes over a cliff, sending the Pacs flying and stranded in the snow. Pac-Man notices a nearby Emergency Power Pellet box but when he goes to retrieve the pellets he discovers that the box is empty. The ghosts catch up to the Pacs where they reveal that they have stolen the power pellets. Pac-man angrily begins to throw snowballs at the ghosts to defend his family. Upset by being hit with snowballs, the ghosts stupidly retaliate by throwing the power pellets back at the Pac family. The Pacs catch the pellets in their mouths and use the newly gained power to "Chomp" the ghosts, reducing them to nothing but floating pairs of eyes. The Ghost eyes begin to fly away.

Meanwhile Santa Claus and his reindeer are flying high in the sky, preparing to distribute gifts to all the good boys and girls. Santa begins to sense that they are a bit off-route and maybe lost; Unknowingly, Santa guides his sleigh right into a collision path with the escaping ghosts. The reindeer, terrified by the sudden sight of the ghostly eyes in their path, cause Santa's sleigh to spiral out of control and crashes into the Pac-Land landscape.

The Pac family, policemen Morris and O'Pac come across the wreckage but are not sure what to make these foreign characters. Santa explains his predicament, telling the Pacs all about his job as toy-giver and peacemaker. The citizens of Pac-Land don't quite understand, but being the friendly and helpful creatures that they are, they agree to help. Unfortunately, Santa's sleigh is ruined and the reindeer are exhausted, injured and a mess.

The family takes Santa inside and fixes him a nice hot cup of cocoa. Pac-Man, eager to help in any way he can, is sent by Santa to go out and retrieve the lost sack of toys – for without those, Christmas can never be saved. So Pac-Man and Chomp Chomp head out to brave the cold, and the ghosts, in search for the bag of toys. Meanwhile, the ghosts (now rejuvenated with new bodies) find the sack and proceed to play with the toys. Pac-Man manages to make off with the sack, but the ghosts manage to chomp HIM in the process, and leave him alone in the forest with the sack, weakened.

Despite his energy nearly gone and nearly being frozen to death, Pac-Man returns home with the toys. Everyone is excited - Christmas is saved! However, Santa Claus does not share the feeling of excitement; he feels that it may too late for him to continue his Christmas run. There is no way his reindeer will be up for the task, and there is no way they will be able to make up for all the lost time. Santa is sure that this will be the first Christmas in history that he misses. However, Pac-Man quickly conjures up a way to save Christmas; he figures they need to boost the reindeers' energy levels. The solution is simple – power pellets! After some sneaky convincing, Pac-Man is able to get the gang past the ghosts and into the fabled Power Pellet Forest. He gets past the ghosts by telling them what christmas is about and to think of the kids who wont get their presents if the don't save christmas. the ghosts finaly understand, sob out for the kids and let the Pacs go.

The reindeer begin chomping away at the power pellets, and immediately start glowing. Santa is thrilled. He flies away from Pac-Land to make his delivery. Pac-Man is delighted - Christmas is saved.

When the family arrive back home they are surprised to find that Santa's made an extra stop this year - at Pac-Man's house! There are presents for everyone, even the ghosts.