Dale accidentally dropped his acorns into the Magical Kingdoms fireworks machine causing it to malfunction and explode into thirteen pieces that scattered all around the amusement park. So Chip and Dale decide to enlist their friends to help collect the pieces of the machine before nightfall hits. They decide that racing would be the quickest way to get the pieces, and since time is of the essence the pieces should go to the quickest of the friends. Of course, everyone wants to be the hero, so the races won't exactly be that friendly.

Walt Disney World Quest: Magical Racing Tour is side-scrolling kart racer. The selectable racers include Chip, Dale,Amanda Sparkle, Tiara Damage, Bruno Biggs, Moe Whiplash, Otto Plugnut Oliver Chickley III, Polly Roger, Baron Karlott, as well as Jiminy Cricket and two other characters who are unlockable after certain conditions are met.

The regular race tracks include racing at Big Thunder Mountain, Blizzard Beach, Dinosaur (Disney's Animal Kingdom), Rock 'N' Roller Coaster, Haunted Mansion, Jungle Cruise, Tomorrowland Speedway, Space Mountain, Pirates of the Caribbean, and Splash Mountain The races consist of going around the track in three laps against three other opponents. On the track itself are coins that when collected increase the players speed and arrows on the ground called zippers which give the player a temporary burst of speed. There are also Mickey balloons that when ran over are popped and give the player an item which can either help the player or hinder their opponent. Items include acorns, guided bottle rockets, teacup mines, frog spell, turbo, and invincibility, There are also eight fairies on each race course to collect that involves the games unlockable content. Coming in first place earns the player a piece of the fireworks machine.

These race courses can be raced three times each, Once for the machine piece, once for a 1st Place Pennant, and once again for a Trophy Challenge. While the first two are done as races with competitors, the Trophy Challenge just has the player by themselves trying to collect trophies in a limited amount of time.

There are also three Disney Challenge courses where the player has to collect 30 coins before the time expires in order to earn a piece of the fireworks machine. The courses are Test Track (Epcot Center), Typhoon Lagoon, and Disney Studios.

Besides the Adventure mode storyline there is also a Time Trial mode.