Pete, a young orphan, runs away to a Maine fishing town with his best friend a lovable, sometimes invisible dragon named Elliott! When they are taken in by a kind lighthouse keeper, Nora, and her father, Elliott's prank playing lands them in big trouble. Then, when crooked salesmen try to capture Elliott for their own gain, Pete must attempt a daring rescue.

For years, old wood carver Mr. Meacham has delighted local children with his tales of the fierce dragon that resides deep in the woods of the Pacific Northwest. To his daughter, Grace, who works as a forest ranger, these stories are little more than tall tales... until she meets Pete, a mysterious 10-year-old with no family and no home who claims to live in the woods with a giant, green dragon named Elliott. And from Pete's descriptions, Elliott seems remarkably similar to the dragon from Mr. Meacham's stories. With the help of Natalie, an 11-year-old girl whose father Jack owns the local lumber mill, Grace sets out to determine where Pete came from, where he belongs, and the truth about this dragon.