"Into The Woods" brings together several well-known fairy tale characters, involves them in a rather convoluted plot, and turns the messages of the original tales on their heads. These storybook characters include Red Riding Hood, Cinderella, Rapunzel, and Jack (of beanstalk fame). Their various story lines are tied together by the main plot, which involves the non-fairy tale characters of the Baker and his Wife. Their greatest wish is to have a child, but they have been unable to do so.
While this is going on, Rapunzel is passing the time in her tower home by sitting in her window, singing. The sound of her voice attracts a prince, who watches her from a distance. While he's there, the Witch shows up- Rapunzel is the baby she took years before- and he hears her call Rapunzel to let down her hair so that she can climb up.
While this is going on, Jack arrives home. His mother, enraged that he has sold the cow for a handful of worthless beans, sends him to bed without supper and throws the beans out in the yard. At the same time, after dancing with the prince all evening at the festival ball, Cinderella is fleeing home through the Woods. She runs into the Baker's wife, on her way home with the white cow. They talk, and Cinderella tells her that she ran from the ball because she wasn't sure how she felt about the prince. The Baker's Wife tells her that she'd love to be in her shoes... and then realizes that Cinderella is wearing gold shoes. She tries to take one, but just then the cow runs off, and while she gives chase, Cinderella leaves. While the Baker's Wife vainly tries to catch the cow, the witch turns up to warn her that the first of the three nights is past.
The prince's steward is stumbling about in the woods with Cinderella's stepmother and stepsisters, fleeing because the castle has been destroyed by a giantess. The bean which Cinderella had thrown on the ground has grown into another beanstalk and the wife of the deceased giant has climbed down to revenge herself on Jack. They meet up with the Baker and co., closely followed by the giantess, who demands that Jack be turned over to her.