TaleSpin is set in the fictional city of Cape Suzette (a pun on the dish Crêpe Suzette), in a fictional country called Usland. The city lies in a harbor protected by an enormous natural cliff wall. A single cleft in the wall is the harbor's only means of access. The cleft is guarded by anti-aircraft artillery, preventing flying rabble-rousers or air pirates from entering the city. The characters in the world of TaleSpin are anthropomorphic animals. The time frame of the series is never specifically addressed, but appears to be in the mid-to-late 1930s. In the show, the helicopter, television and jet engine are experimental devices, and most architecture is reminiscent of the Art Deco style of that period. In one episode, Baloo comments that "The Great War ended 20 years ago,"[15] thus indicating that the series takes place in or around 1938. Radio is the primary mass medium, and one episode even briefly alludes to the characters having never heard of television.[16]

The series centers on the adventures of bush pilot Baloo the bear, whose air cargo freight business, "Baloo's Air Service", is purchased by Rebecca Cunningham upon his default on delinquent bills with the bank and renamed "Higher for Hire". An orphan boy and former air pirate, the ambitious Kit Cloudkicker, attaches to Baloo and becomes his navigator. He sometimes calls him "Papa Bear". Together, they are the crew of Higher for Hire's only aircraft, a 20-year-old modified Conwing L-16 (a fictitious aircraft using elements from the Fairchild C-82 transport, Grumman HU-16 amphibian, and a Consolidated PBY-3) named the Sea Duck. From there, the series follows the ups and downs of Higher for Hire and its staff, sometimes in the vein of old action-adventure film serials of the 1930s and 1940s and contemporary variations, such as Raiders of the Lost Ark.

Their adventures often involve encounters with a gang of air pirates led by Don Karnage, as well as with representatives of Thembria (a parody of the Stalinist Soviet Union inhabited by anthropomorphic boars), or other, often even stranger obstacles. In deference to contemporary sensitivities, there is no equivalent of the Nazis in the series, although one story in Disney Adventures Magazine, "The Dogs of War!", had the heroes encounter members of the "Houn" nationality, a menacing militaristic nationality of dogs from "Hounsland" who wear uniforms that are clearly based on German ones and who speak in a mock-German accent.[17]

The relationship between Baloo and Rebecca owes something to the screwball comedy films of the 1930s. More precisely, according to Jymn Magon (co-creator of the series), the two characters were fashioned after Sam Malone and Rebecca Howe from the then-por sitcom Cheers.[18]