In a world inhabited by monsters, the city of Monstropolis is powered by the screams of human children. The top company in the city, Monsters, Incorporated, specializes in collecting these screams by sending monsters through doors that connect to children's closets. Here, monsters emerge at night to scare the sleeping children, capturing their screams which are then converted into energy. Sulley, an amiable and gigantic blue creature, is the top scarer at Monsters, Inc. His sidekick and best friend is a green, opinionated, one-eyed monster named Mike Wazowski. Both are respected employees and believe firmly in the company's mission, though they remain unaware of the terror they inflict on children, whom they've been taught are toxic and dangerous.

A routine day at work goes awry when a human child inadvertently follows Sulley back into the monster world. Panic ensues as children are believed to be highly toxic, and a single touch could be fatal to a monster. Sulley and Mike, through a series of unintended circumstances, become the caretakers of the child, whom Sulley names Boo. As they struggle to return Boo to her world, the pair discovers unsettling truths about their industry. They face challenges that shake the very foundation of their society, including the attention of the Child Detection Agency, a group dedicated to preventing the contamination of the monster world by human children.