Lots-O'-Huggin' Bear (voiced by Ned Beatty) (Lotso for short) is a plush, pink teddy bear with a purple nose, a sweet strawberry scent and a southern accent, who uses a wooden toy mallet as a cane. He is the leader of the toys of the Sunnyside Daycare Center and serves as the main antagonist of the third film. He initially acts like a kind-hearted and wise caretaker, but is later revealed to be more of a ruthless warden, although his backstory makes him more of a tragic villain.
He is first seen welcoming Andy's toys to Sunnyside and assigning them to the Caterpillar Room, where they are roughly played with by the youngest kids in the daycare center. Lotso and his gang ride around the daycare in a big yellow dump truck. At Bonnie's house, Woody learns from Chuckles the Clown that he, Lotso and Big Baby were once owned and loved by a girl named Daisy; Lotso was Daisy's favorite toy. During their time with Daisy, Lotso was considered a kind-hearted friend to both Chuckles and Big Baby. this state of affairs continued until a day when Daisy and her family had lunch in the countryside. When the little girl fell asleep, her parents put her into the car and drove away, forgetting the toys. Lotso managed to lead his two friends on the long trek back to Daisy's house, only to discover that Daisy had gotten another Lots-O'-Huggin' Bear from her parents. This left Lotso heartbroken, convinced he had been forgotten and replaced. As a result, Lotso goes from kind-hearted, nice, sweet, and hopeful, to cold-hearted, ruthless, cruel, and merciless. Out of bitterness, the angry toy lies to Big Baby that he too has been replaced, and they leave Daisy's home. Chuckles, knowing that Lotso just said it because he felt bitter about it, tries to reason with Lotso, but is unsuccessful and has no choice but to leave with the two other toys. Lotso discovers Sunnyside and turns it into an Internment Camp for toys, believing he is protecting the imprisoned toys from being abandoned by their owners. Big Baby takes on the role of Lotso's enforcer; Chuckles is found by Bonnie and taken home.
During half of the film, Lotso's minions catch Buzz outside of the Caterpillar Room and restrain him in the library where Lotso arrives, having learned that Buzz is actually requesting a transfer of himself and the rest of Andy's toys to the Butterfly Room. Thinking of Buzz to be useful to him, Lotso grants it only to him, stating that the kids going to Caterpillar Room really need some toys to play with. Buzz understands of what Lotso meant, but respectufully refuses, saying that he and the rest of Andy's toys stay together as a 'family'. Still thinking that Buzz can be useful, Lotso then orders his henchmen to restrain him and reset him to demo mode using a Buzz Lightyear Instruction Manual, causing Buzz to don his deluded space ranger personality again. With that in mind, Lotso then manipulates Buzz into imprisoning the rest of the Andy's toys with the help of his henchmen.
When Woody returns, he develops a plan for Andy's toys (including Buzz, who has rejoined them after being accidently set to Spanish mode) to escape from Sunnyside at the climax of the movie, but Lotso foils the plan. Woody then reveals his knowledge of Lotso's deception about Daisy to Big Baby, leading the teddy bear to reveal his true feelings about all toys (including his henchmen): that they are nothing but worthless trash waiting to be thrown away and destroyed. Big Baby, having had enough of Lotso's lies and deception, throws him into a dumpster. In revenge, Lotso pulls Woody into the dumpster as well. As a garbage truck collects the bin for delivery to the city dump, Woody's friends are forced to tag along. At the dump, the toys end up on a conveyor belt leading to a shredder. Finding Lotso stuck under a large golf bag, Woody and Buzz rescue him and escape the shredder, only to find they've ended up on another belt leading to an incinerator. As they are about to reach the incinerator, Lotso finds an emergency stop button, and with Woody and Buzz's help, manages to get to it. Rather than pushing the button, he instead angrily runs off and leaves Andy's toys to die, still believing that all toys are trash. Thanks to the Squeeze Toy Aliens, Andy's toys escape the incinerator. Hamm and Slinky vow revenge on Lotso for leaving them to die, but Woody tells them to forget about it, arguing that no more trouble should befall Lotso and knowing that Lotso just needs to regain the love he has lost many years as punishment. Still trying to escape the dump, Lotso is found by a garbageman, who fondly remembers having a Lots-O'-Huggin' Bear as a kid. Sticking to his love of the teddy bear, the garbageman straps him to the grille of his garbage truck between three other toys. As the truck pulls away, one of the three toys advise Lotso to keep his mouth closed to keep bugs and trash out, as Lotso cringes.
The character was originally conceived as a teddy bear from the early 80s Care Bears toy line. This idea was not dropped until after the storyboard was completed and can be seen in the tie-in book The Art of Toy Story 3. Lotso made a cameo appearance in Up, another Pixar film.