Dragon Tales is based on the characters created in 1978 by Laguna Beach, California artist and retired educator Ron Rodecker. In 1997, Jim Coane, then a producer at Columbia TriStar Television, found the artwork and developed it into a television series with several writers. Coane then brought the project to Sesame Workshop, where Marjorie Kalins helped him and Columbia TriStar Television obtain a grant from the Department of Education and the Corporation for Public Broadcasting. The grant proposal was written by Wesley Eure. Coane was the executive producer for the first two seasons.
When six-year-old Emmy and her four-year-old brother Max move into a new house, they discover an ancient dragon scale that transports them to Dragon Land, a world of fantasy that brims with talking trees, rainbow rivers, gnomes, giants – and dragons! They meet the young dragons Ord, Cassie, Zak and Wheezie, who have human personalities and share similar fears and questions about growing up as Emmy and Max.
Alongside their new dragon friends and their teacher Quetzal, Emmy and Max explore the magical world that they’ve found, encountering challenges and working together to find solutions. Each episode introduces a new challenge for the children and the dragons. Topics like dealing with fear of the doctor, learning to speak up, and coping with separation from a sibling help viewers learn strategies for navigating their own challenges.
In the episodes, the children go to Dragon Land by using their magical dragon's scale found in a hidden location within their playroom and reciting the verse "I wish, I wish, with all my heart, to fly with dragons, in a land apart." The children transport back to their world in their playroom by using the same refrain and the phrase "I wish, I wish, to use this rhyme, to go back home, until next time."
In Dragon Land, the children meet up with their Dragon friends, Cassie, Ord, Zak, and Wheezie (the latter two each being half of a two-headed dragon), and their bilingual teacher, Quetzal, as they learn valuable life lessons, aided by the fact that the children are inexperienced with the magical flora and fauna of Dragon Land.
The series mixes in Spanish language elements to promote a bilingual experience for the audience. By incorporating parts of another language, the show appeals to a wider audience, as well as providing a new learning experience for children.
Each show is divided into three segments: the first story, a song known as a "Dragon Tune," and the second story. Each story is approximately 10–12 minutes long.