Marlin, a clownfish, has just found an anemone for himself, his wife, Coral, and their 400 eggs to live in. When a barracuda suddenly attacks and eats all but one of the eggs, and presumably Coral, Marlin becomes very protective of the only one that survived, whom he names Nemo, a name Coral liked. Due to a scratch on his egg, Nemo was born with an abnormally small "lucky" right fin which causes Marlin to not only worry over his swimming ability but also doubt his son’s ability to do anything.
On his first day of school, Nemo disobeys his father and ventures away from the reef to touch the bottom of a boat. This enrages Marlin, and starts an argument in front of Nemo's classmates. To his father's horror, Nemo is captured by a scuba diver. Marlin tries to save Nemo, but is blinded by the camera flash of another diver. The boat disappears into the distance.
In search of help, Marlin bumps into Dory, a naïve but good-hearted and optimistic Regal tang with short-term memory loss. While meeting would-be vegetarian sharks Bruce, Anchor and Chum, Marlin discovers a diver's mask that was dropped from the boat. During a hazardous struggle with an anglerfish in the deep sea, Dory realizes she is able to read the address written on the mask, P Sherman, 42, Wallaby Way, Sydney. After receiving directions from a large school of moonfish, Marlin and Dory set out to find Sydney. They encounter hypnotic jellyfish where Marlin saves Dory's life, nearly at the cost of his own. Later they befriend a surf cultured sea turtle named Crush, who is 150 years old and still healthy and strong, while "riding" the East Australian Current. In the current, Marlin reluctantly shares the details of his journey with a group of young sea turtles, and his story spreads rapidly across the ocean through word of mouth and eventually reaches Sydney.
Meanwhile, Nemo's captor, a dentist, drops him into a fish tank in his office on Sydney Harbour. There, Nemo meets its residents — a group of aquarium fish called the "Tank Gang", led by a crafty and ambitious moorish idol named Gill. The fish are frightened to learn that the dentist plans to give Nemo to his niece, Darla, who has previously killed a pet fish by shaking its container. Gill gives Nemo a role in his most recent escape plan, which involves jamming the tank's filter and forcing the dentist to remove the fish from the tank while he cleans it manually. Nemo attempts to jam the filter using a rock, however his first attempt fails and nearly kills him because of the fact that the fan is too strong for the rock to be wedged in, but he later succeeds after a friendly pelican named Nigel visits with news of Marlin's adventure. The plan, however, is backfired when the dentist installs a new high-tech filter and has no need to take the fish out of the tank.
Upon leaving the EAC, Marlin and Dory become lost in a huge bloom of plankton, and are engulfed by the mouth of a blue whale after swimming in its path. Inside the whale's immense mouth, a desperate Marlin repeatedly charges against the baleen in the whale's mouth in a futile attempt to free himself and Dory, then breaks down in despair. Dory reassures him, then calmly communicates with the whale from inside its mouth, and the whale carries them to Sydney Harbour. When they reach Sydney, the whale expels them through its blowhole (after a short but fearsome trip down its gullet). They are then met by Nigel, who recognizes Marlin from the stories he has heard and rescues him and Dory from a flock of hungry seagulls by scooping them into his mouth, and then takes them to the dentist's surgery. By this time, the dentist has put Nemo into a bag and is preparing to give him to Darla, but Nemo plays dead in hopes of saving himself and the dentist prepares to toss Nemo in the trash bin, but Marlin, Dory, and Nigel enter in the nick of time and cause a commotion. Marlin sees Nemo and mistakes this act for the actual death of his son and the dentist finally throws them out. After another chaotic struggle, Gill helps Nemo escape into a drain through a sink plug-hole. Although the rescue of Nemo by Gil took place outside the aquarium, Gil still survived and returned to the Tank Gang. The last scene in the doctor's office is when Darla emotionally screamed hoping Nemo return to be her new pet.
Overcome with despair, Marlin leaves Dory and swims back toward his home. Without Marlin, Dory loses her memory and becomes confused, but meets Nemo, who has escaped into the ocean through an underwater drain pipe. Dory at first does not realize who Nemo is, but her memory is suddenly restored after she reads the word "Sydney", and she guides Nemo to Marlin. The two joyfully reunite, but shortly afterwards, Dory is caught in a fishing net among a school of grouper. Nemo convinces Marlin to let him attempt to save Dory, by entering the net and telling the school to swim downward all at once —- a technique he learned from the Tank Gang. The fish succeed by ripping the net from the boat and escape, and Dory and Nemo were free. Although Nemo appeared to be injured in the sight of Marlin, he finally recovered after long time of jokes and stories and returned to their home, the coral reef. No longer overprotective or doubtful of his son's safety, Marlin sees Nemo off as he leaves for school.
A short scene after the film's conclusion shows the dentist complaining about the breakage of the new tank filter. The Tank Gang have escaped into the harbor, but realize they are still confined to the bags of water that the dentist put them into when cleaning the tank.