Long ago, the Frost Giants attempted to conquer the Nine Realms. Odin and his Asgardians fought back against them, eventually defeating them. As a show of their victory, the Asgardians take the source of Frost Giant’s powers, the Casket of Ancient Winters.
Many years later, a grown Thor is about to inherit the throne from his father. After swearing his oath, Odin is about to make it official when Frost Giants attempt to steal back the Casket. Odin summons the Destroyer, who kills the intruders.
After securing the Casket, Thor demands that they attack Jotunheim, the home of the Frost Giants, in retaliation. Odin denies his request, not willing to start a war when the thieves have already been punished. This angers Thor, thinking his father weak.
Later, Loki tells Thor that he agrees that they should attack the Frost Giants. Emboldened by his brother’s agreement, Thor convinces the Warriors Three and Sif to come with him to Jotunheim. When they arrive, Laufey, the king of the Frost Giants, says he had nothing to do with the attempted theft and that Asgard was filled with traitors. After being provoked, Thor attacked the Giants, but eventually he and his friends found themselves overrun and retreat.
Odin saves them at the expense of the truce between the two worlds. As punishment for Thor’s arrogance, Odin strips Thor of his godly powers, exiles him to Midgard and enchants his hammer, Mjolnir, so that only a worthy man could lift it and receive the power of Thor.
Thor arrives on Earth and is discovered by the scientist Jane Foster and her team consisting of her mentor, Erik Selvig, and assistant, Darcy Lewis. Initially, they think Thor is a crazed homeless person, if a very attractive one, and take him to a hospital. The next day, some locals discover Mjolnir and unsuccessfully attempt to lift it.
Shortly afterwards, SHIELD quarantines the area and confiscates of Jane’s research. As a last resort, she finds Thor, hoping he might have some answers. He tells her that if she helps him get to his hammer, he would tell her everything. She agrees and gets him to the quarantine zone. Thor breaks in and fights his way towards the hammer, we even get a glimpse of Clint Barton. Unfortunately, when he does get to the hammer, he is unable to lift it. With some help from Erik and a budding romance with Jane, Thor resigns himself to exile on Earth.
Back in Asgard, Loki discovers that he is not the son of Odin; he is actually the son of Laufey who Odin adopted in hopes of joining the two worlds in peace. When Odin is confronted by Loki, the stress is too much, causing him to fall into the Odinsleep to recover, allowing Loki to become king. Loki then goes to Jotunheim to offer the Frost Giants the Casket in exchange for them killing Odin. They readily agree.
The Warriors Three and Sif suspect Loki of treachery and go to Earth to bring Thor back. When Loki learns of this, he sends the Destroyer after them to kill Thor. Knowing that nothing can stop it, Thor confronts the Destroyer, giving the others a chance to escape. The Destroyer strikes him, bringing him close to death, but the selfless act proved him worthy of the hammer and it came to him, restoring his powers which he uses to defeat the Destroyer. He and his godly friends return to Asgard after Thor kisses Jane and promises he will return.
Loki betrays and kills Laufey, planning on using Laufey’s attempt on Odin’s life as an excuse to destroy Jotunheim, hoping to prove to Odin that he was worthy of him. Thor, filled with a newfound compassion, fights Loki to prevent the senseless destruction. Ultimately, Thor defeats Loki and was forced to destroy the Bi-Frost bridge to stop the destruction, separating Asgard from Earth. Odin awakens and prevents both Loki and Thor from falling into the abyss, created by the bridge’s destruction, but when Loki saw the disappointment in Odin’s eye, he allows himself to fall into the abyss, his fate unknown. Thor and Odin reconcile, with Thor admitting he is not yet ready to be king. Back on Earth, Janet and her team continue to look for any sign of the Bifrost and Thor.
After the credits, Nicholas Fury shows Selvig the Tesseract, wanting him to study it in hopes of discovering untold power. Loki, seen only in a reflection whispers to Selvig to agree, which he does.