- “Y'see, Buster, you really have had a wonderful cartoon show.”
- ―Harvey after showing Buster how miserable everyone would be without him
"It's a Wonderful Tiny Toons Christmas Special" is the 98th and final episode of Tiny Toon Adventures, and also the series' Christmas episode, originally aired as a prime-time special on FOX on December 6, 1992. As suggested by the title (and a line in the opening sequence), the story is a parody of the classic Christmas film It's a Wonderful Life (which the series' creator, Tom Ruegger, has stated to be his favorite Christmas movie).
The special opens on Christmas Eve in Acme Acres, where much like the opening scene from It's a Wonderful Life, the Toonsters are praying to the heavens on behalf of their star, Buster Bunny (with Plucky Duck being a seeming exception who then starts praying for Buster's sake when he's convinced that no one else is looking). Up in the sky, God is heard summoning a rabbit angel named Harvey, telling him that Buster is thinking of quitting Tiny Toons because he thinks he's a failure. God then proceeds to show Harvey the circumstances that led to this:
Earlier that day, Buster is in charge of directing the Tiny Toons Prime-time Holiday Spectacular. During the rehearsals, Montana Max, who is in a wheelchair because he had an accident while skiing with Morgan Fairchild, is outraged to learn that he's been cut out of the special because Buster didn't think he would show up. Furious, Max does everything to ruin the rehearsals - he causes Li'l Sneezer to sneeze during his Christmas Carol sketch, he convinces Babs that Buster is flirting with her ice-skating partner Cher, he rigs the stage so that Cher falls into a tub of Acme piranhas, and he replaces Plucky and William Shatner's microphones with dynamite sticks. Everyone takes out their frustration on Buster, and to make matters worse, Max bribes Fran and Edward, the FOX network executives who are overseeing production, into putting him in charge of the special. Feeling he's let everybody down, Buster leaves, causing his friends to worry for him.
As the story has caught up to what was going on when the episode began, Buster heads off to literally "throw himself out of the picture" (by jumping out of the celluloid). But before he can do so, Harvey drops in, introducing himself to Buster as his "guardian toon angel". Buster refuses to believe this angel is for real, until he makes a wish that he'd never been on Tiny Toons, which Harvey instantly grants. Buster retorts that Warner Bros. would never let him out of his contract, at which point a bolt of lightning suddenly disintegrates said contract from his hand.
To prove his point, Harvey takes Buster to an alternate reality where he never existed, in which Acme Acres has been taken over by Montana Max and renamed "Montyville". In this reality, Plucky is the main star of Tiny Toons, which he has turned into nothing more than a vanity project for himself, and Babs is a hapless patsy who constantly has anvils dropped on herself. When Buster sees this, he storms the set of the show and confronts Alternate Plucky, screaming, "What are you, goofy?" Insulted by that remark ("What are you, a spy from Disney?!"), Alternate Plucky mistakes Buster for a crazy fan and has this universe's equivalents of Arnold and Sneezer (the latter of whom is named Sleazer) throw Buster out.
Still refusing to listen to what Harvey's telling him, Buster takes a look at Acme Looniversity, only to find that, in this universe, it is "Montana Max's Business Looniversity", where students learn about business 24/7 (literally, because Max has given the students an 18-hour day, due to the holidays). Finally realizing what Harvey is showing him, Buster asks him what happened to Babs in this universe, and Harvey responds by pointing him to the school's film vault. In there, Buster comes upon the alternate universe's version of Babs - a hopelessly depressed, miserable girl, watching old Looney Tunes shorts. After they introduce themselves to each other and he finishes with the famous end line, "No relation," she wonders if she knows him (because it's the first time since she'd starred with Plucky on Tiny Toons that that end line has ever worked). When Buster tells her flat-out that they're the real stars of the series, Alternate Babs berates that idea and runs away. This proves to be the crushing blow for Buster, who pleads to Harvey to send him back to the world he knows. Harvey says he'll see what he can do, but first they have to break for commercials.
After the commercial break, Harvey disappears and seems to abandon Buster, until the Babs that he knows comes into the film vault and addresses him directly. Buster is ecstatic about this and runs about kissing and giving holiday greetings to everything in sight (including wishing a Happy Hanukkah to executive producer Steven Spielberg). After a while of this, Babs stops him and tells him that Monty, as the new director, is ruining the special (his skits include Plucky reading a ridiculous poem about banking, and Elmyra being cast as Leona Helmsley). Buster's position as director is restored when he returns to the Looniversity, and he then promises Max that he's given him a new part as the star - though, as Max soon finds out, Buster means "Christmas tree star". Buster then reveals that earlier he was actually asking Cher what to give Babs for Christmas; when Babs asks him what it was, he responds by giving her a very deep kiss. The special ends with the main characters singing a song concluding with a variation of Clarence's note to George: "No Toon is a failure who has friends." In the very last shot, Harvey takes off his rabbit costume, revealing himself to be Bugs Bunny, and comments, "Not bad...for amateurs."