Norm Snively, an alcoholic clown, and his Golden Retriever, Old Blue, are doing a show at a child’s birthday party by demonstrating the dog’s ability to catch balls thrown at him. After Old Blue causes trouble at the party, Snively is fired. Angry, he plans to take Old Blue to a dog pound, but the kennel falls out of his truck. A car crashes into the kennel, freeing Old Blue, who follows it. The car is carrying 12-year-old Josh Framm, who briefly makes eye contact with the dog.
After the death of his father, a pilot who died in a plane crash during a test flight, Josh has relocated with his mom Jackie and 2-year-old sister Andrea from Virginia to Fernfield, Washington. Due to his grief, he is too shy to try out for his middle school’s basketball team, the Timberwolves, or make any friends. He instead becomes the basketball team’s equipment manager. After school, Josh practices basketball by himself in a makeshift court that he sets up in an abandoned allotment, where he meets Old Blue. Josh gradually gains the dog’s trust and renames him Buddy. He soon discovers Buddy’s uncanny ability to play basketball, and decides to take him home.
Jackie is initially reluctant to keep Buddy but agrees to let him stay with them until Christmas, planning to send him to the pound if his rightful owner is not located. At school, Josh earns the disdain of star basketball player and team bully Larry Willingham, but befriends the kind-hearted engineer, Arthur Chaney, and discovers he was a retired pro player. After seeing that Buddy is helping Josh overcome his heartbreak over his father’s death, Jackie allows Josh to keep Buddy as a Christmas present.