When small-time inventor Rand Peltzer (Hoyt Axton) comes across a mysterious little creature called a mogwai while selling products in Chinatown; he buys the critter for a Christmas gift for his son; Billy (Zach Gallagan). The mogwai; Gizmo (Howie Mandel) is quite the popular pet until Billy breaks the rules of mogwai ownership: never get it wet; keep it away from bright light; and don't ever feed it after midnight. Soon the peaceful town of Kingston Falls is infested by violent malevolent monsters known as gremlins; and only Billy; his girlfriend Kate (Phoebe Cates); and Gizmo can put an end to the horde and prevent the town from becoming a gremlin paradise.