It's Christmas at Third Street School and the nativity comes around. Mikey tries to prove the existence of Santa to the rest of the gang; however, he proves to himself that he doesn't. Then something unexpected happens.
A few days before Christmas, Hank is getting ready to plow the snow, however, to his displeasure, there isn't any snow on the ground and the students are treating the weather like summer. The younger kids on the playground are treating it like winter, however, such as building snowmen out of sand, and sledding on the grass. Vince brings up the fact that how when he and the rest of the Recess Gang were little kids, they would get excited for the Christmas season, too. The gang all discuss what's on their Christmas lists, and see Mikey over by King Bob's jungle gym, writing a list for Santa Claus, until the bell rings, where he went to go see the tryouts for the Christmas play.
In the auditorium, the kindergarteners, Upside-Down Girl, Hustler Kid, Randall, and the Ashleys are all on stage for tryouts. Ms. Finster calls them hooligans and tells them to pipe down, or that they'll be in detention until Christmas yet to come. At the same time, Principal Prickly is showing television producer Mr. Bream the school, to see if he'd use it for his Christmas special. Right as Mr. Bream tells Prickly that the school was like every other school he's been to, Mikey arrives. Originally not wanting to try out and just trying to get into the spirit, Mr. Bream wants him to be the Santa Claus in the play. Mikey auditions under expectations, until Prickly reminds him of how he sang for the middle school music teacher, Miss Salamone. He then belts out a "Ho ho ho!" in his singing voice, and is chosen to play Santa.
After auditioning, the gang are sitting on the school jungle gym when Mikey decides to invite Santa to the play. Randall hears this and taunts Mikey for still believing in Santa. T.J. tells Mikey that there are kids who don't believe in Santa, though Mikey doesn't understand this. Gretchen tries to explain that an overweight man in a red suit delivering millions of presents in one night is very unlikely, and he still doesn't believe her.
Back in the auditorium, Miss Grotke is choreographing the play, and instructing the Ashleys' dance routine as the reindeer in the play. Also, Mr. Bream is on the phone explaining the Christmas pageant to the television station owner. The gang are sitting in the audience when Mikey brings a stack of encyclopedias to show the gang that Santa is real. Vince reads about Saint Nicholas, and brings up the fact that he died years ago. Mikey still doesn't believe them, and runs out.
Later that day, the gang are at the mall in line for meeting Santa with Mikey. Mikey runs up the the mall Santa and sits on his lap, and asks him to do a few things for the gang to show them that he's the real Santa. However, the mall Santa can't take Mikey's weight on his legs, and pushes him off. He asks Trisha, his assistant, to get his replacement, which she can't because he's on break. The gang get their Christmas photo taken- with the mall Santa ripping his beard off.
The gang walk down the street, and Mikey explains that he was just an imposter, and that the real Santa was going to be in the town's Christmas parade. The gang arrive at the parade, and see Santa Claus in the parade. "Santa" talks to the kids and offers them gifts, making Mikey excited, and Gus even thinking that Santa really does exist. However, when he's getting the kids candy from the back of his sleigh, his beard comes off, and it's reavealed that he's actually Mayor Fitzhugh just trying to get more votes.
After the parade, Mikey hears Santa on the radio, and runs down to the station, K-XMS. He asks the receptionist where Santa is, and she tells him Santa's not there. He runs into the recording station, and sees DJ Ricky McCloud just doing the voice of Santa for his radio show. Crushed, Mikey leaves in tears, and decides not to appear in the play.
That night, back at the school, Hank is still looking for signs of snow. People begin to arrive for the Christmas pageant, and the gang decide to tell Prickly that Mikey decided not to come. Before they can, Randall tells Miss Finster, who tells Prickly. They decide to cast Randall as Santa.
As Mikey walked down the street alone, he sits at a curb and rips his letter to Santa. An old man at the retirement home on the same street noticed Mikey, and Mikey told the man about how his friends don't believe in Santa. The man tells him that it doesn't matter if you can see him or not, if he believes he's real, he's real.
The Christmas play starts, and each of the kids go up and say something about what they represent. Aside from the Ashleys as reindeer,
Spinelli and Gretchen come up dressed as Druids for Winter Solstice, Gus as an elf, Vince as "Good King Kwanza", T.J. as "Harvey Hanukkah", and finally, Randall as Santa. Unfortunatly, Randall gets stage fright when it's his turn to come up. All of a sudden, Mikey arrives as Santa, on a sleigh pulled by the kindergarteners dressed as elves. He and the gang begin to sing "White Christmas", as it starts snowing outside. After the show ends, Hank throws the doors open and exclaims that it's snowing.
Everyone goes outside and notices the snow, and the kids begin playing in it. The old man whom Mikey met earlier tells Mikey that he did a good job, and that he was there because Mikey invited him. The gang wonder who that guy was, but Mikey realizes that he was Santa Claus.
- This is the first full 30-minute (counting commercials) episode.
- This is the only Christmas episode of the series.
- This episode was later released on video and DVD in 2001, known as Recess Christmas: Miracle on 3rd Street.
- This episode was originally going to air on December 19, 1998, but due to Disney's One Saturday Morning being pre-empted for news coverage on Bill Clinton's impeachment, it was delayed to December 26, the day after Christmas.
- This episode was re-aired on December 12, 1999 on UPN's Disney's One Too block along with other episodes of shows that were Christmas-themed such as the Disney's Doug episode "Doug's Secret Christmas" and the Sabrina, The Animated Series episode "Witchmas Carole." It was also re-aired on December 18, 1999(a year after its intial airing)on Disney's One Saturday Morning along with other episodes of shows that were Christmas-themed such as the Disney's Doug episode "Doug's Secret Christmas" and the Pepper Ann episode "A Kosher Christmas".
- This episode is hardly ever rerun on its own anymore. Most showings of this episode on Disney Channel or Disney XD (and previously on Toon Disney) instead show the entire Recess Christmas: Miracle on Third Street movie.
- The episode marks the first time the Ashleys wear their bathing suits. They wear them again in The Ratings Game and The Coolest Heat Wave Ever.
- This is the only 30-minute episode released on video and DVD.
- The day before this episode premiered, Recess Happy Meal Toys began to be given out at McDonald's.
- When Mayor Fitzhugh appears in this episode, he has black hair instead of grey.
- This was the only episode to feature a different closing theme. Instead of a shortened version of the theme song, a Recess-themed version of "Jingle Bells" played.
- When the kids were singing "White Christmas", only Spinelli, Gretchen, and Vince were played by their regular voice actors. Aside from Robert Goulet as Mikey, the rest of the gang were played by members of the Disney Chorus.
- T.J. Detweiler (Speaking) - Andrew Lawrence
- T.J. Detweiler (Singing) - Aaron Page
- Vince LaSalle - Ricky D'Shon Collins
- Ashley Spinelli - Pamela Segall-Adlon
- Gretchen Grundler - Ashley Johnson
- Mikey Blumberg (Speaking) - Jason Davis
- Mikey Blumberg (Singing) - Robert Goulet
- Gus Griswald (Speaking) - Courtland Mead
- Gus Griswald (Singing) - Megan Moore
- Miss Finster - April Winchell
- Miss Grotke - Allyce Beasley
- Principal Prickly - Dabney Coleman
- Hank/Mall Santa - Paul Dooley
- Randall Weems/Kid #1 - Ryan O'Donohue
- Hustler Kid - Michael Shulman
- Ashley Armbruster - Anndi McAfee
- Mr. Bream - Michael McKeane
- Trisha/Kid #2 - E.G. Daily
- Ricky McCloud - Jess Harnell
- Mayor Fitzhugh - Ronnie Schell
- Santa Claus - James Earl Jones
- Robotic Santa/TV Editor/Astronaut - Gregg Berger
- Dick Clark - Himself
- Additional vocalist for "White Christmas" - Bobbi Page