Shortly after the Ocellaris clownfish Marlin and his wife, Coral, move into a new home, Coral is eaten by a barracuda along with all of their eggs, except for one. Marlin finds that egg and promises it he will never let anything happen to it, naming it Nemo per Coral's earlier suggestion. The attack has left the egg damaged.

Some time later, Nemo begins his first day at school, but is frustrated and embarrassed by his overprotective and neurotic father. Marlin has constantly warned Nemo about the dangers of the ocean because he himself fears them, and also because one of Nemo's fins—his "lucky fin"—is much smaller and weaker than the other, possibly due to the damage to his egg. Disobeying his father in order to show him that these fears are unfounded, Nemo deliberately swims out to open water; in the process, he is captured by a scuba diver. Marlin races after the diver's boat but quickly loses it. As he desperately searches for help, he bumps into Dory, a regal tang who suffers from short-term memory loss but is nonetheless relentlessly optimistic, in contrast to Marlin. The pair soon encounter three sharks, Bruce, Anchor and Chum, who are members of "Fish Eaters Anonymous," an organization modeled after AA.

Marlin and Dory find the diver's scuba mask and, injured and bleeding due to a scuffle over the mask, inadvertently spark Bruce into a feeding frenzy and are forced to flee into a deep trench, only to be nearly eaten by an angler fish. Dory remembers that she can read and, reading the address on the mask, they discover that Nemo has been taken to Sydney, Australia. Dory surprises herself by being able to remember the name and address written on it. A passing school of fish gives them directions to get there via the East Australian Current, and also advises them to go through, not over, the trench that leads to it. However, only Dory hears the warning, and Marlin, disliking the looks of the trench and distrusting Dory, leads them over it, where both are nearly stung to death by a mass of box jellyfish.

Meanwhile, Nemo is placed in a fish tank in a dentist's office. The dentist, Philip Sherman, the scuba diver who captured him earlier, plans to give Nemo to his niece Darla as a birthday present; the other fish in the tank—Bloat, a puffer fish; Jacques, a Pacific cleaner shrimp; Deb/Flo, a humbug damselfish; Peach, a starfish; Bubbles, a yellow tang; and Gurgle, a germophobic royal gramma—fear Darla greatly, knowing her tendency to handle fish so roughly that they die. Their leader, the Moorish idol Gill, has been plotting a mass escape and calls on Nemo to jam the tank's water filter. The first attempt fails, nearly costing Nemo his life, and Gill apologizes for endangering him for personal gain.

Marlin and Dory are found by a group of sea turtles who are riding the East Australian Current, and they make a full recovery. As Marlin befriends the turtle Crush and his son Squirt, he tells some of the sea turtles about his reason for venturing so far from home. His story travels among the sea creatures, eventually reaching Nemo via a friendly Brown Pelican named Nigel. Nemo is inspired by this account and makes a second attempt on his own to jam the filter, this time meeting with success. The tank begins to get dirty, and the fish hope that the dentist will take them out so he can clean it; once they are in individual plastic bags, they can roll out the window and into the harbor. However, while they are sleeping, he installs a high-tech filter to keep the tank clean automatically, foiling their plan. Then, Darla arrives.

Marlin and Dory are swallowed by a humpback whale, which delivers them safely to Sydney. Confronted by a pelican and a flock of hungry seagulls in the harbor, they are rescued by Nigel, who takes them to the office as the dentist removes Nemo from the tank and puts him in a bag. When Darla arrives, Nemo pretends to be dead, hoping that he will be flushed down the toilet and thus be able to reach the ocean. Marlin and Dory are shocked to see Nemo belly-up and believe he is truly dead. After they and Nigel are thrown out the window, Gill helps Nemo escape down the drain of the dentist's sink to the ocean.

Deeply depressed in the belief that his rescue attempt amounted to nothing, Marlin thanks Dory and tells her he is going home on his own. Dory, however, is reluctant to be left by herself again, claiming that she can remember things better when he is around. Marlin still swims away to go home, leaving Dory hopelessly lost and confused. A chance encounter with Nemo jogs her memory of her adventures with Marlin and the two catch up with Marlin and there is a brief and happy reunion. Moments later, Dory is caught in a fishing net along with a school of grouper. Nemo has an idea to save her by telling the fish caught in the net to swim down, a trick the other fish in the tank had tried to use to save him from being scooped up in the dentist's net. Though Marlin is afraid to let him go out of fear of losing him again, he realizes that he has to let Nemo take this chance. The maneuver works, snapping the winch, freeing Dory and the grouper, and Marlin reconciles with Nemo and apologizes for being overprotective.

Once they have returned home, Marlin is able to let Nemo "go have an adventure" at school with his classmates, including the new exchange student, Squirt. Marlin also impresses and wins the respect of his neighbors for going across the ocean to find his son, especially after his credibility is enhanced by the appearance of the three sharks, who are bringing Dory home from a Fish-Eaters Anonymous meeting. The fish in the dentist's office make their escape, having followed their earlier plan of breaking the filter and rolling out the window, across the street, and into the harbor, leaving them with the dilemma of how to escape their plastic bags.