A stuffed rabbit sewn from velveteen is given to a small boy as a Christmas present but is forgotten in favour of new mechanical toys. The oldest toy in the nursery, the Skin Horse, tells the rabbit about toys magically becoming Real due to love from children. Although he is awed by this idea the rabbit realises that this will probably never happen to him. His chances improve, however, when the boy is given the rabbit to sleep with as a replacement for another lost toy and it soon becomes his favourite.
'Time passes, and the rabbit becomes shabbier, but happier. One day, the boy becomes sick with scarlet fever, and the rabbit sits with him as he recovers. The doctor orders that the boy should be taken to the seaside, and that his room should be disinfected, and all his books and toys burnt - including the velveteen rabbit. The rabbit is bundled into a sack and left out in the garden overnight, where he sadly reflects on his life with his boy. The toy rabbit cries and a real tear drops onto the ground, and a marvellous flower appears. A fairy steps out of the flower and comforts the velveteen rabbit, introducing herself as the nursery magic fairy. She says that because he is old and shabby and Real, she will take him away with her and "turn [him] into Real" - to everyone. The fairy takes the rabbit to the forest, where she meets the other rabbits and gives the velveteen rabbit a kiss. The velveteen rabbit changes into a real rabbit, and joins the other rabbits in the forest. The next spring, the rabbit returns to look at the boy, and the boy sees a resemblance to his old velveteen rabbit' (Wikipedia).