In a summer that’s been notable for its string of money-losing box-office busts, most of them sequels, along comes a late-season entry in that other feared genre: the reimagining of a kiddie-film classic. Only this time, even fewer people would accuse the source material of even being a classic. Mind you, the studio behind Pete’s Dragon—a remake-in-name-only—is Disney, which has been increasingly successful in updating old hits from its animation catalog, retooling these time-honored stories to serve a live-action milieu, albeit one enhanced with the latest CGI wizardry.

But here’s the thing with 1977’s Pete’s Dragon: The idiosyncratic musical already took place within a live-action world, populated by actors like Mickey Rooney, Red Buttons, Shelley Winters and Jim Backus—hammy performers whose best work was long behind them. Nevertheless, child viewers responded to the story of 8-year-old orphan Pete (Sean Marshall) and his larger-than-life sidekick, the titular hand-drawn dragon Elliot, while overlooking the fact that director Don Chaffey’s live-action/animation hybrid was kind of awful.

Which is why it comes as such a shock that Disney’s latest is, hands-down, the best revival the studio has produced. Indie writer/director David Lowery and co-writer Toby Halbrooks have dropped the cartoonishness of the earlier film’s live action and animation in favor of a heightened realism, removing nearly everything save the names of young Pete and Elliot. Gone are the musical production numbers and the early-1900s Maine setting, replaced by a more timeless backdrop that should be familiar to anyone who’s seen the films of Terrence Malick or Robert Altman.

Pete’s Dragon is both beautiful (Bojan Bazelli’s widescreen lensing deserves to be seen on the biggest screen you can find, in 3-D, if available) and a narrative triumph, one that shares a bit of DNA with an animated Disney classic that thankfully hasn’t been remade: Bambi. That 1942 film and 2016’s Pete’s Dragon both begin with the tragedy of losing parents before focusing on the journey of finding a new family. As 5-year-old Pete (Levi Alexander) sits in the back seat of his parents’ car, thumbing through a picture book about a boy and his dog, Elliot Gets Lost, a deer darts in front of their car on the secluded forest road, orphaning the young boy in an instant. Wandering from the wreck, Pete is nearly devoured by wolves that circle around him in the dense woods, but he’s saved by the magical dragon he takes to calling Elliot, after the puppy in his storybook.

This is a very different dragon than the one Don Bluth animated in Chaffey’s film, not a special effect but another character. As Pete reaches out and pets the green fur on the back of Elliot’s outstretched palm, the hairs that cover nearly every inch of Elliot’s frame stand on end, his emerald color brightening as an unspoken bond is formed between the two.

The story jumps ahead six years and we hear the unmistakable voice of Robert Redford, playing a grizzled old woodcutter who tells a timeworn tale of a dragon he encountered as a boy—the only other human to have seen Elliot—to an audience of children in this fictional Pacific Northwest town. But he’s interrupted by his grown daughter Grace (Jurassic World’s Bryce Dallas Howard), a preservation-minded park ranger who loves her dad but wishes he’d focus on the real world.

Returning to the woods, we’re reintroduced to Pete (now played by Oakes Fegley), long-haired and filthy. The 11-year-old runs through the forest in a loincloth, much like Mowgli ran through the jungle in Jon Favreau’s recent, fantastic remake of Disney’s 1967 animated favorite, The Jungle Book. But while that film was backed by a blockbuster budget of $175 million, Lowery’s film was produced for a comparably meager $65 million. You’d never know it. This picture looks wonderful, from the natural environments shot in New Zealand to the seamlessly naturalistic effects work by Weta Digital. Their artistry extends to the canine quality of Elliot, who chases his own tail when he’s not running through the woods playing fetch with a tree trunk. But Pete and Elliot’s idyllic play is interrupted by Grace, whose lyrical humming triggers something in the boy, who presumably hasn’t seen another human being in six years. Pete is drawn to her maternal presence, staying just out of her line of sight, even as he snatches her metal compass, a sentimental heirloom that inadvertently sets Pete down a new path.

When deforestation efforts threaten to encroach upon Pete and Elliot’s makeshift home within a massive tree, the nearly feral boy is tempted to venture from the wilderness paradise he shares with his best friend, setting the stage for a lovely movie that’s best described as magical. Rarely manipulative and aided by a tender, down-home musical score by Daniel Hart that occasionally soars under Elliot’s spread wings, Pete’s Dragon is not only one of the summer’s best surprises, but a new Disney classic.

Pete’s Dragon *** 1/2

Starring Oakes Fegley, Bryce Dallas Howard, Oona Laurence, Wes Bentley, Karl Urban, Isiah Whitlock Jr., Levi Alexander, Esmée Myers, Gareth Reeves, John Kassir and Robert Redford. Directed by David Lowery. Written by Lowery and Toby Halbrooks, based on a screenplay by Malcolm Marmorstein and a story by Seton I. Miller and S.S. Field. At Assembly Row, Boston Common, Fenway and in the suburbs.