Hubie (voiced by Martin Short), a shy, gullible but kindhearted penguin, is in love with the beautiful and kind Marina (Annie Golden), but lacks self-confidence leading him to be bullied by the much more impressive, but vain and cruel Drake (Tim Curry) also wants Marina, but clearly out of lust. One night, Hubie and Marina share a song under the moonlight and their feelings are confirmed for each other. Hubie, however, is luckless in finding a perfect pebble to propose to Marina with and wishes on a star to make his dream come true. An emerald falls from the sky next to Hubie. Ecstatic, Hubie rushes to find Marina when Drake tries to steal it and knocks him off the ice, and Hubie has swept away and nearly killed by a Leopard Seal.
Hubie is picked up and caged by a ship, which is transporting penguins to a zoo. The unfortunate penguins on the ship sing of the misery awaiting them. The Antartic Shall be Icey and free. Hubie meets a streetwise crested penguin named Rocko (James Belushi), whose only wishes are to live in sunny climates and learn to fly. After seeing Drake warning Marina of the full moon where she must choose to be his mate or be banished in a dream/vision, Hubie decides to escape. Together, Hubie and Rocko flee, and while lying low on a beach, Hubie convinces Rocko to help him return to Antarctica. They have a short fight (because Hubie had angered Rocko by lying to him) and later run into the hungry and persistent leopard seal (second time for Hubie). They escape the seal, as Rocko had commented Hubie as "amazing", and both sing to the beginning of their friendship (although Rocko feels hesitant towards it).
When Rocko starts to teach Hubie how to fight, they run into their worst aquatic enemy: the Killer Whale. While trying reaching the home ice, Rocko tries to head-off the orcas while Hubie tries to approach the nearest iceberg, having to lose his pebble and Rocko in the process. After the chase, he must face his worst enemy, who has captured his love. Hubie gets knocked out but gains confidence, and he stands and fights Drake once again. Hubie has the upper hand on the second go-round, and with a skillful kick, he sends Drake plummeting to his supposed demise. In a surprise, Rocko reappears unharmed to Hubie and Marina, but not before Hubie proposes to Marina, who accepts. Before Hubie can introduce his friend to Marina, Drake reappears. He throws a large boulder (with Marina on top of it) towards Hubie and Rocko, but it is Drake who meets his demise, by being crushed to death by the entire tower. Rocko saves the couple in danger and finally gains his ability to fly. Rocko, having found Hubie's pebble, gives it back to him and it is presented to Marina, who loves it, but then states that she loves Hubie more. In the end, Rocko teaches Marina and Hubie's children to fly.
- Martin Short as Hubie, a shy, good-hearted adelie penguin and is the main protagonist of the film.
- James Belushi as Rocko, a roguish, streetwise Northern Rockhopper Penguin who befriends Hubie and helps him win Marina on the way back to Antarctica. He is the deuteragonist.
- Annie Golden as Marina, a beautiful female adelie penguin who is Hubie's love interest. She is the main tritagonist of the film.
- Tim Curry as Drake, a large, hunky, vain, dark-hearted adelie penguin and the film's main antagonist.
- Shani Wallis as the narrator.
- Frank Welker as the Leopard Seal, the film's secondary antagonist.
- Campbell Morton as the Killer whales, the tertiary antagonists, and the Ant.
- "Now and Forever" - Hubie, Marina, Company
- "Sometimes I Wonder" - Hubie
- "The Good Ship Misery" - Company
- "Don't Make Me Laugh" - Drake
- "Sometimes I Wonder - (Reprise)" - Marina
- "Looks Like I Got Me a Friend" - Hubie and Rocko
- "Now and Forever (Reprise)" - Company
- "Now and Forever (End Credits)" - Barry Manilow and Sheena Easton
The Pebble and the Penguin was panned by critics, audiences, and even Don Bluth himself. Rotten Tomatoes reported only 11% of critics gave positive reviews based on eight reviews with an average score of 3/10. The film was given a Two Thumbs Down on "Siskel & Ebert. Gene Siskel noted that the film's animation looks "cheap and unfinished" and "that none of the songs are memorable" while Roger Ebert added his dislike of the film's color code of its heroes and villains.
The film grossed $3.983 million, only 14.2% of its $28 million budget.
In the Nostalgia Critic's review of the film, he said that out of all the bad Don Bluth movies, The Pebble and the Penguin is the least bad. Despite panning the animation and songs, he praised the voice talents.
The film first was released on VHS and laserdisc on August 15, 1995. It was first released on DVD in 1999. A new Family Fun Edition was released in the United States and Canada on March 27, 2007, by 20th Century Fox Home Entertainment. Gary Goldman supervised the restoration for the "Family Fun Edition", which features color corrections and refielded scenes to add missing effects and correct other errors from the first release. In 2007 The Fun Edition was nominated for the Satellite Award for Best Youth DVD. In 2010 the film was released along with "Rock-a-Doodle" as a double-sided DVD. The 2-disc set is still available on DVD with new cover artwork and is usually $4.99 or $5 depending on the retailer, and is more common than the Own the Moments release with "Rock-a-Doodle".