You won’t just forget you are watching an animated movie; you will forget you are watching a movie. That is how completely we enter this wonderful world, and how reluctantly we leave it.

“Toy Story 3” has more honest, acutely observed, and engaging characters, a more authentic understanding of the poignant complexities of the human condition, bigger laughs, and better action than most live-action films and is close to being as authentic and involving as real life. You have to remind yourself, a little sadly, that these are not toys you’ve played with and people you know. It is by any standard and in any category a masterpiece.

It was just 15 years ago that Pixar released the first “Toy Story” and changed the course of movies forever. They made it about toys because the limited motion and smooth, shiny surfaces of plastic made it possible to hide the limitations of the technology of the time. And as they have with every film they produced, they made the story and the characters come first. It was the writing — and the voice performances by Tim Allen and Tom Hanks and the rest of the cast — that made the movie come to life. Ten record-breaking, genre-shattering films later, Pixar returns to the story of Buzz and Woody with all of the humor and action and even more heart. The early works were kids’ movies adults could enjoy but as they showed with “Up,” they are now making films for grown-ups that kids will appreciate.

As with “Up,” “Toy Story 3” begins with a brief flashback sequence filled with a breathtaking mastery of telling, evocative detail. Once there was a time when children played with toys powered by imagination rather than batteries. We go back in time to see Andy playing out a fabulously inventive adventure and the buoyant energy of his vision, acting rather than re-enacting, is jubilant with the pure pleasure of making things up. (This must be what it is like to work at Pixar.)

But time has gone by. Andy is packing for college and the only way the toys who love him can get his attention is to hide his cell phone in the toy box. He has to clear out his room. Where will the toys go?

Through a mix-up, they find themselves at a day care center where they are at first warmly welcomed by the toys who live there, led by Lots-o’-Huggin’ Bear (voice of Ned Beatty). It seems perfect; with new children coming every year they will never be outgrown or neglected. “No owners means no heartbreak.” They have a chance to do what they love — making kids happy.

But things begin to go very badly. They are placed with children who are too young to make up stories for them or care for them. When Buzz Lightyear protests, he is rebooted, restored to his original programming. Once again, Woody must come to the rescue, and once again, they must decide what their purpose is and where their loyalties are.

The first movie came out in 1995, but the toys were intentionally retro, more familiar to the parents in the audience than the children. The little green soldiers, the barrel of monkeys, the Potatoheads, the slinky dog, and the cowboy were old school. Part of the poignancy of the first film was the arrival of the first battery-powered, space-age toy, Buzz Lightyear. And part of the charm of the second film was its theme about what value means — is it better to be in mint condition forever and sold on eBay as a collectible or to be played with and loved, knowing that childhood is brief and the person you are devoted to will leave?

The new characters in this film are perfectly rendered replicas of toybox classics (bet you grown-ups can’t get through the movie without saying to the person next to you, “I had that!”) and originals that fit in so perfectly you can almost remember seeing the ads and humming the jingle. Barbie (voice of “The Little Mermaid’s” Jodi Benson) and Ken (voice of Michael Keaton) show some unsuspected depth (her political views are surprisingly well-founded) and he has some unanticipated growth opportunities. His wardrobe provides some of the movie’s most delicious moments, especially when he reverses the usual movie convention to put on a montage try-on session. I also loved Mr. Pricklepants (voice of Timothy Dalton), a Vincent Crummles-style thespian (a stuffed and stuffy hedgehog) who reminds Woody about the pleasures of play, a theme that gently deepens and expands, so entertainingly you don’t realize how stirring it becomes.

All of this is done with wit and style and action-packed chase scenes, and then it is brilliantly, perfectly resolved, showing us that the time the toys spent with Andy helped to make him who he is. I dare you not to cry. It’s a happy ending that like all great movies makes us think more wisely about our own sense of purpose and connection. And it reminds us, too, of the pleasures of imagination by showing us what it can achieve.