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Special events director Dorey Walker (Elizabeth Perkins) hires a white-haired and whiskered old man, who calls himself Kris Kringle (Richard Attenborough), to play the role of Santa Claus at Cole's department store in New York City. Dorey's six-year-old daughter Susan (Mara Wilson) takes a liking to the old gent and, despite her tendency to be the quintessential realist, Susan begins to believe that Kris might really be Santa Claus, so she asks him to bring her the one thing she wants most—a dad, a brother, and a real house of her own. However, when the Santa Claus that Kris replaced (because he was drunk) sets up Kris to be charged for assaulting him, Dorey's boyfriend Bryan Bedford (Dylan McDermott) must prove to a court of law that Kris is not only Santa Claus but that he is the real Santa Claus. Otherwise, Kris will be committed to Bellevue Hospital for being insane.

Miracle on 34th Street is a remake of Miracle on 34th Street (1947) (1947), which is based on a story idea by American film-writer Valentine Davies and a screenplay by American filmmaker George Seaton. The screenplay for this movie was updated by American film-maker John Hughes, who also coproduced the movie. Davies also penned a novella version of the story, which was published simultaneously with the 1947 film release. Two other versions of "Miracle on 34th Street" have also been made—Miracle on 34th Street (1959) (1959) and Miracle on 34th Street (1973) (1973), both made-for-TV.

An article posted in the Los Angeles Times on 17 April 1994, two reasons are given. One reason, reported by a spokeswoman for Macy's, explained that "we feel the original stands on its own and could not be improved upon." A second speculation is that Macy's did not want to cooperate because it was, at that time, nearly $6 billion in debt and didn't want to be in the spotlight until the bankruptcy was settled. However, the Macy's spokeswoman did not comment on this subject.