Plot
Jim Hawkins is a young orphan who lives in an inn in England with his best friends, Gonzo and Rizzo. Jim’s father was a first mate who died when he was seven years old. He listens to Billy Bones' tales about the pirate Captain Bernie Flint, who buried his treasure trove on a remote island and executed his crew so only he would own the island's map. One night, Bones' former crewmate, Blind Pew, arrives, and gives Bones the black spot. Before dying of a heart attack, Bones gives Jim the treasure map and begs him to go after the treasure and keep it safe from pirate hands, especially a one-legged man. Bones’ other former crewmates attacks the inn, thus destroying it, but Jim, Gonzo, and Rizzo escape with the map.
The trio takes the map to the half-wit Squire Trelawney (Fozzie Bear), who arranges a voyage to find the treasure. The trio are enlisted aboard the Hispaniola as cabin boys, accompanied by Trelawney, Dr. Livesey (Bunsen Honeydew), and Beaker. The ship is commanded by Captain Abraham Smollett, (Kermit the Frog) who was a friend of Jim’s father, and his strict first mate, Mr. Samuel Arrow (Sam Eagle). The boys meet the cook Long John Silver, the one-legged man whom Bones warned them of, but Jim and Silver become good friends. The ship sets sail, but Smollett is suspicious of the crew, believing them to be shady. After Gonzo and Rizzo are kidnapped and tortured by three of the crew who have turned out to be pirates, Smollett and Arrow imprison them in the brig and have the treasure map locked up for safekeeping.
It is revealed that Silver and the secret pirates want the treasure for themselves. Silver fools Mr. Arrow into leaving the ship to test out a rowboat, tells the crew he drowned, and has his minions steal the map during Arrow's memorial service. Jim, Gonzo, and Rizzo discover Silver's treachery and inform Smollett. Arriving at Treasure Island, Smollett orders the entire crew, save the officers, to go ashore, planning to keep himself and the non-pirate crew aboard the ship and abandon the pirates on the island. However, his plan falls through when it is discovered that Silver has kidnapped Jim to have leverage against the captain.
On the island, Silver invites Jim to join them in the treasure hunt by using his late father's compass. When Jim refuses, Silver forcibly takes the compass from him. Smollett, Gonzo, and Rizzo land on the island in an effort to rescue Jim. However, unbeknownst to them, Silver had hidden a squad of pirates aboard the Hispaniola before leaving, and they capture the ship in Smollett's absence. On the island, Smollett and the rest of the landing party are captured by the native tribe of pigs, where Smollett reunites with his former lover, and the pigs’ queen, Benjamina "Mina" Gunn, (Miss Piggy) who took up with Captain Flint and was abandoned by him on the island after Smollett jilted her.
The pirates find that the cave in which Flint hid his treasure is empty, leading to a brief mutiny. Silver reveals that despite being a pirate, he cares for Jim and allows him to escape. After reprimanding the crew for using a page from the Bible to deliver a death sentence, Silver and his crew capture Smollett and Mina. Smollett is hung from a cliff to fall to his death, joined soon by Mina after she reveals where the treasure is hidden to save his life. Jim rescues his friends and with an alive Mr. Arrow, who portrays his own ghost to scare the pirates aboard the ship. The group regains control of the Hispaniola and rescues Smollett and Mina.
The group engages the remaining pirates in a sword fight on the beach with Sweetums defecting to Smollett's side until only Silver is left standing, but he surrenders when he finds himself outnumbered. While the pirates are imprisoned, Silver discovers that he still has Mr. Arrow's keys and tries to escape with the treasure during the night. Jim confronts him and threatens to give his position away, while Silver draws his pistol. Neither of them can bring themselves to follow their threats, so Jim allows Silver to leave as long as they never cross paths again. Silver rows away, but not before returning Jim's compass to him and complimenting his kind heart. However, Mr. Arrow informs Jim and Smollett that the boat Silver used was not seaworthy, and Silver is later stranded on Treasure Island.
Jim becomes the honorary captain of the Hispaniola, which sails back to England, but not before some scuba-diving rat tourists Rizzo brought to the ship earlier recover the treasure from the sea.
