Elmo loves his furry blue blanket more than almost anything in the world. When Zoe wants to play with it, he refuses, as it's his. They tug, and Elmo's blanket is nearly ripped—and a gust of wind blows it into Oscar's trash can and through a portal to Grouchland.
Elmo enters Grouchland to retrieve his blanket, but finds it just in time to have it stolen by Huxley, who considers everything to be his. Elmo embarks on an epic quest across the land to reach Huxley's home and rescue his blanket—and meanwhile, his friends are searching for him.
This movie provides examples of:
- An Aesop: It's not nice to hog possessions, even if they are special to you.
- Another Dimension: Grouchland is an alternate world where all the Grouches live, and everything there runs on Bad Is Good and Good Is Bad.
- Audience Participation: The audience is encouraged to help Elmo at certain points.
- Award-Bait Song: "Precious Wings" is an inspirational song played during the end credits.
- Bad Boss: Huxley mistreats Bug terribly.
- Bad Is Good and Good Is Bad: It's against the law to ask for help in Grouchland, and their likes and dislikes are backwards to ours.
- Because You Were Nice to Me: Elmo's simple act of saying Bug is "very nice" for giving him (false) directions, and giving the latter a hug before continuing on his way, is what initiates Bug's HeelFace Turn in the end.
- Big Bad: Huxley is responsible for all the danger in the plot and Elmo getting back the blanket that he stole is his main objective.
- Big Damn Movie: The second big movie for Sesame Street, involving Elmo traveling to Grouchland to retrieve his stolen blanket.
- Big Ol' Eyebrows: Huxley has these. Appropriate enough, given that he lives among grouches.
- Bigger on the Inside: Oscar's trash can serves as a portal to Grouchland.
- Blowing a Raspberry: The Queen of Trash demands one hundred of these "raspberries" in a set time.
- Card-Carrying Villain: Huxley revels in being evil and greedy, stealing everything just because he can.
- The Cameo: Model and actress Vanessa Williams portrays the Queen of Trash in a brief cameo.
- Companion Cube: Elmo loves his blanket so much he talks to it, acts like it's alive, sleeps with it, and refuses to share it.
- Continuity Porn: The contents of Oscar's trash can, while briefly seen, are full of items and objects mentioned on the show.
- Darkest Hour: After narrowly escaping being eaten by a giant chicken, Elmo starts to give up on getting his blanket back.
- Embodiment of Vice: Huxley embodies Greed, though he denies that in his song:"Some may call it greed;
it's not, it's need.
A need I love to feed;
The need to have a lot!
- Friendship Denial: Played with, then subverted; Oscar almost calls Elmo his friend whilst he is imprisoned with the search party looking for Elmo, and even Big Bird caught what he was going to say at the last minute. Oscar denies it and says that instead he was going to say French Fry Fish Hips. Oscar then admits, at the encouragement of the others, that Elmo is his friend.
- Grumpy Bear: The Grouches, particularly Grizzy, are grouchy but not bad.
- HeelFace Turn: Bug eventually turns good.
- The Hero's Journey: Elmo goes through one, almost by the numbers.
- Ineffectual Sympathetic Villain: Bug is completely ineffectual in his attempts to stop Elmo.
- Jerkass Realization: Elmo has one when the Queen of Trash compares him to Huxley. Just to drive the point home, there's a flashback of Elmo's behavior at the beginning of the movie, screaming at Zoe that his blanket is "Mine!" when Zoe asked him to share... which is the same way Huxley acts.
- Kid-Appeal Character: Elmo and Bug are cute characters meant to appeal to kids.
- Lampshade Hanging: When Elmo asks the audience to help blow raspberries for the Queen of Trash's "ultimate challenge", one of the Stenchmen takes note of it:Stenchman: He's getting help! Is that legal?
- Large Ham: Huxley gets a whole song about how evil he is, and spends much of his screen time hamming it up.
- Lighter and Softer: Compared to the other Sesame Street film Follow That Bird, this one is less intense.
- Minion with an F in Evil: Bug is terrible at being evil and acts as Huxley's voice of reason, which he ignores.
- Mistreatment-Induced Betrayal: Combined with Because You Were Nice to Me above. After being a Butt-Monkey for most of the film, Bug is the one to return Elmo's blanket, after telling off an incapacitated Huxley, and then forces Huxley to promise to give back everything he stole or claimed as his own.
- Music for Courage: "Take the First Step," although it's sung to only one person. By a plant and some woodland critters.
- Naked People Are Funny: Bert first appears in his shower cap.
- No Fourth Wall:
- Bert manages to pause the movie four times to ask Ernie about certain details (First, when Elmo is hurdling through the portal to Grouchland, second, after Huxley takes off with Elmo's blanket, third, when Huxley tells Bug his plans to lure Elmo into the Queen of Trash's kingdom, and lastly, when Elmo is sitting at the foot of Mt. Pickanose, at his "all-is-lost-moment"), as a way of reassuring the audience (and Bert) that everything will be fine.
- Elmo himself directly addresses the audience a few times, either asking for help and advice, or just needing someone to talk to.
- Bert and Ernie also address the audience once more when the movie ends, commenting on the happy ending, and telling the audience to give themselves a round of applause for playing along. Bert even stays behind to look at the credits, only persuaded to leave when Ernie tells him it's time to feed Bernice.
- Not So Different: Elmo has this realization thanks to the Queen of Trash. Specifically, Huxley's constant attitude is "Mine!", because he can't share anything. Elmo acted the same way at the beginning of the film, refusing to share his blanket with Zoe "because it's mine!"
- Parental Bonus:
- Parent Service: Vanessa Williams' scene provides a good deal of fanservice for adults.
- Psychopathic Man Child: Huxley acts like a child but is a grown-up, and when Elmo breaks in to reclaim his blanket he tries to crush him with a stamper.
- Rousing Speech: Oscar gives one to the Grouches while in prison.
- Throw the Dog a Bone: Bug gets a HeelFace Turn and returns Elmo's blanket after enduring enough of Huxley's actions.
- Toilet Humor: Grizzy's Soggy-Pants Sandy doll's main feature is the ability to wet her pants.
- Villain Song: Huxley's song, appropriately titled "Make it Mine!"