“Teddy Ruxpin’s Christmas” is a special edition musical story celebrating the Christmas season. It was originally released for the 1st and 2nd generation Worlds of Wonder Teddy Ruxpin talking toy with subsequent releases for the Yes! Entertainment, BackPack Toys, and Wicked Cool Toys Teddy Ruxpin talking toys. The story is notable as being the only story released for a specific holiday, though it follows in the footsteps of other similar seasonal stories such as “Grundo Springtime Singtime” and “Teddy’s Winter Adventure”.

The story would later be abbreviated to “Teddy’s Christmas” for the Yes! Entertainment release.

Upon its release, the story was originally packaged with a special Teddy Ruxpin Santa Claus outfit consisting of a red coat lined in white fur, red trousers, a pair of black boots, belt, and traditional Santa Claus nightcap.

“This story shows the value of gathering together with friends at Christmastime.”

Teddy and Grubby greet the listener, and explain that they’re ready to share the joy of Christmas with them. They immediately launch into a medley of songs (“Christmas Medley”).

At the end of their first set of songs, Teddy and Grubby are joined by Newton Gimmick and many of their other friends. After another chorus of “A Wassaling”, Teddy suggest that while they’re all together they perform their special Grundo version of “The Twelve Days of Christmas”, which everyone eagerly joins in on.

Grubby mentions running out legs as he tried to keep track of all twelve days in the song, and Gimmick suggests a second medley of songs centered around bells (“Bell Medley”).

With the medley over, Grubby complains his ears are still ringing as they are joined by another group of carollers. They perform “Oh Christmas Tree” before Gimmick suggests that Teddy and Grubby tell the story of “The Night Before Christmas” (“Twas the Night Before Christmas”).

With the story complete, the carollers sing “We Wish You A Merry Christmas” as a holiday farwell.

• The traditional opening of "Come Dream With Me Tonight" has been given a special, holiday-inspired composition. This can also be heard at the start of “Teddy’s Winter Adventure”.
• While most of the songs featured in this story are traditional Christmas songs, there is one original work: a special adaption of "The Twelve Days of Christmas" with Grundo-inspired themes. This was composed by Will Ryan, the voice of Grubby.
• This is one of only four specially packaged stories released for the original Teddy Ruxpin that featured special outfits or other accessories. The other three are "Lullabies II", "Teddy Ruxpin Sings Love Songs," and "Teddy Ruxpin Summertime".
• Many of these songs were compiled into a special edition audio cassette that was then distributed to members of Hasbro’s team in the early '90’s as a special thank you from Alchemy II for picking up the license and distribution of Teddy Ruxpin following Worlds of Wonder’s bankruptcy. A special greeting was recorded for the Hasbro employees, but was otherwise unchanged from what is found in this story.
• This is one of the only stories to mention the six Crystals Teddy and his friends found in the Hard-to-Find-City