Abstract: An amphibious toy vehicle having paddles located within the wheels of the toy vehicle which can be extended outside the wheels in order to propel the vehicle forward and backward in water. A flotation chamber is provided at the bottom of the vehicle. A gear assembly including rack gears is used to extend and retract the paddles. After the paddles are retracted inside the wheels, the toy vehicle may be moved over a supporting surface by the rotating wheels. A downwardly extending portion attached to an upper body of the amphibious toy vehicle helps to keep motors mounted inside the vehicle dry when the toy vehicle is placed in water.