In Monstropolis, electricity is powered by the screams of children. Monsters, Inc. is a scaring company and James P. "Sulley"Sullivan is one of the top scarers and about to break the all time scare record. Mike Wazowski is Sulley's teammate, friend, and roomate, and the monster responsible for preparing Sulley's station. However, Randall Boggs is close to Sulley's record as well. Sulley breaks the record, but later finds a door to the human world in Randall's station. A 2-year-old girl escapes into the monster world and takes a liking to Sulley. However, human children are believed to be toxic so Sulley has to take every precaution not to be caught with her by the Children Detection Agency (CDA). The two sneak the girl who Sulley dubs "Boo" home with them and have to keep her secreted away until they can return her to her world tomorrow.
While they try to return Boo, Randall kidnaps Mike (thinking he was Boo), and reveals new technology: a scream extractor, used to suck the screams out of hard to scare children. Sulley rescues Mike and they take Boo to Henry J. Waternoose III, the chairman of Monsters, Inc. to help return the little girl to her home. However, Waternoose instead banishes the two to the Himalayas where they meet The Abominable Snowman (voiced by John Ratzenberger), a monster that had been banished years ago. Mike and Sulley fight because all Sulley cares about is Boo, but Sulley heads to the nearby village and use another door to return to the monster world. Mike comes with to apologize and they save Boo from the scream extractor.
Randall pursues the trio to the storage room for all the doors used by Monsters, Inc. which they activate by making Boo laugh. The three run through the human world with Randall hot on their heels until they trick him into a door, then destroy it, trapping him in the human world. Sulley finds Boo's door, but it's moved out of storage by Waternoose who is planning on using the scream extractor on as many kidnapped children as needed to protect the company. Mike catches Waternoose's speech on camera and the CDA arrest him. Boo is returned home, but the CDA insist that her door must be destroyed so she can never return the monster world.
Sullivan becomes the new chairman of Monsters, Inc. and begins a new are for the company. Children's laughs are more powerful than screams so the monsters now go into children's rooms as comedians. Mike then reveals to Sully that he reassembled Boo's door, and Sulley opens the door to reunite with Boo.
Mike and Sully reappeared in the 2002 short, Mike's New Car.
A prequel to Monsters, Inc. entitled Monster University is scheduled to be released June 21, 2013.