One day, the four children go on a trip through the forest with Cornelius, which ends in a boat ride. After the boat ride, they go back to the forest to find out that it has been destroyed with poison gas from an overturned tanker truck that had been transporting chlorine gas.
Michelle goes into her house, only to breathe some of the gas and become severely ill. Abigail manages to save her, and the Furlings go to Cornelius' house nearby for shelter. There, Cornelius tells the Furlings that they need to fetch two herbs that can help Michelle: lungwort and eyebright. With only a limited amount of time, they head off for their journey the next day.
After encountering numerous obstacles including a hungry owl, a flock of religious wrens, and intimidating construction equipment, the Furlings make it to the meadow with the herbs they need. After collecting some eyebright, they discover that the lungwort is on a giant cliff making it inaccessible by foot. Russell suggests they use Cornelius' airship, the Flapper-Wing-a-Ma-Thing, to get to the lungwort.
The Furlings manage to get the lungwort, and they steer their airship back for Dapplewood. They crash-land back in the forest after a storm, and bring the herbs to Michelle and Cornelius. After a group of humans who have come to clean up the gas' mess save Edgar from an old trap, the Furlings help Michelle get better. The next day, she wakes up from her coma. The Furlings' parents arrive as well, except for Michelle's mother and father, who were killed in the gas accident.
Russell is a hedgehog, and a very chubby one at that. He is a very hungry fellow who loves to eat a lot. He lives with his mother and 13 siblings.
Edgar is a mole. He is very intelligent, and like Abigail, a very sweet animal. He is extremely shy (and at some points in the movie, not too brave), but willing to stand up for his friends. He lives with his mama, and he might have a crush on Abigail the woodmouse.
Michelle is a young 5-year-old badger, and is the niece of the Furlings' teacher Cornelius. She is super-curious, and very adorable. After her parents are killed in the gas accident, she presumably moves in with her uncle.
Cornelius is the Furlings' teacher, and is Michelle's uncle as well. He is the oldest and wisest animal in Dapplewood. He not only serves as a teacher, but also makes flying machines of his own design. He has a vast knowledge of herbs, and cares deeply for his niece Michelle.
At the suggestion of Liz Kirschner, the wife of the film's producer, The Phantom of the Opera's Broadway star Michael Crawford was chosen to play Cornelius. Members of South Central Los Angeles' First Baptist Church were chosen to voice the chorus accompanying the preacher bird Phineas (voiced by Ben Vereen). While filming the live-action references, the crew "was thrilled beyond [...] expectations [as the chorus] started flipping their arms and moving their tambourines", recalls Kirschner.
H-B co-founder William Hanna was in charge of the film's outsourcing by Cuckoo's Nest Studio in Taiwan. "[It is] the finest feature production [we have] ever done," he told The Atlanta Journal-Constitution in May 1993. "When I stood up and presented it to the studio, my eyes teared up. It is very, very heartwarming."
Kirscher spoke to The Dallas Morning News' Philip Wuntch a month later on the diversity of the film's production services: "Disney has great animators, and the studio has them locked up for years and years. We got the best worldwide animators available from Sweden, Asia, Argentina, Spain and England." Work on the animation was in the hands of Wang Film Productions, another Taiwanese company; Lapiz Azul Animation and Matias Marcos Animation of Spain; the Jaime Diaz Studio of Argentina; Denmark's A. Film; and The Hollywood Cartoon Company. Mark Swanson Productions did computer animation for the "Yellow Dragons" and the Flapper-Wing-a-Ma-Thing.
Because of time constraints and budget limitations, over ten minutes were cut from the film before its release. One of the deleted scenes featured the voice of Glenn Close, whose character was removed entirely from the final storyline. At around the same time, the Fox studio changed the name of The Endangered to the present Once Upon a Forest, for fear audiences would find the former title too sensitive for a children's film.
The quality of the animation and story, the attributes of the characters, and the movie's environmental approach were rebuked by Hinson and many other reviewers. Famed critic Roger Ebert's feelings on the film were mixed; he deemed it "a children's animated adventure that seems to have been conceived as an anthology of Politically Correct attitudes". He noted at the end of his review, "[It] has a good heart—I liked the way it treated its themes—but the movie is kind of dumb.
The film's advertising at the time promised a new masterpiece "from the creator of An American Tail". The creator in question was David Kirschner, who served as Tail's executive producer. But ReelViews' James Berardinelli and the Times Union of Albany found it misleading, hoping instead for the likes of Don Bluth.
In spite of the financial dearth and criticisms, Forest soon gained a cult following among its fans. Fox Video's original VHS and laserdisc issue of the film, released on September 21, 1993, proved successful on the home video market for several months. On February 22, 2005, it premiered on DVD, with the content presented in fullscreen and widescreen formats. The original trailer was included as the only extra on the Australian Region 4 version.
The multimedia company Sanctuary Woods also released a MS-DOS game based on the film, on CD-ROM and floppy disk for IBM computers; Beth Agnew served as its adapter. Many elements of the game stayed faithful to the original source material.