Theodore "Ted" Wiggins, an idealistic 12-year-old boy, lives in "Thneedville", a walled city that, aside from the citizens, is completely artificial: everything is made of plastic, metal, or synthetics. Ted sets out to find a real tree in order to impress Audrey, who Ted has a crush on. His energetic grandmother suggests he speak with the Once-ler about this, if he wishes to visit him, he must pay fifteen cents, a nail and a shell of great-great-great grandfather snail. When he sets off outside the city discovers that their city has been closed off from the outside world, which is a contaminated and empty wasteland. The Once-ler agrees to tell Ted about the trees if he listens to his story over multiple visits. Ted agrees, even after the mayor of Thneedville, Aloysius O'Hare, who is also the greedy proprietor of a bottled oxygen company, confronts the boy and pressures him to stay in town. Over the course of the film, Ted, with the encouragement of his grandmother, continues to sneak out of O'Hare's sight and learns more of the history of the trees.
Over the visits, the Once-ler recounts the story of how he departed his family to make his fortune. In a lush Truffula Tree forest, he met the Lorax. He is a grumpy yet charming orange creature who served as guardian of the land. At first, the Once-ler had a plan to chop down the trees. Eventually, he promised not to chop another tree down. The young businessman's Thneed invention soon became a major success and the Once-ler's family arrived to participate in the business. Keeping his promise at first, the Once-ler continued Thneed production by harvesting the tufts themselves in a sustainable manner. Unfortunately, his greedy and lazy relatives convinced him to resume logging as a more efficient gathering method. Breaking his promise, the Once-ler's deforestation spiraled into a mass overproduction. Flush with wealth, the Once-ler rationalised his short sighted needs into arrogant self-righteousness and the helpless protests of the Lorax could not stop him. The Once-ler polluted the sky, river and landscape, until finally the last Truffula Tree fell outside, and the Once-ler realised what he had done while making the region uninhabitable with his business's pollution. With that, the Once-ler was left ruined and abandoned by his own family and became a recluse with the creation and isolation of Ted's town that came under young Mr. O'Hare's control, giving him the plan to sell fresh air with the absence of trees. Eventually, the Lorax sends the animals away to another good place before departing himself into the sky, leaving a stonecut word: "Unless".
At the end of the story, the Once-ler understands the meaning behind the Lorax's last message, and gives Ted a gift of the last Truffula seed in hopes of planting it to regrow the forest. Ted's desire to impress Audrey is now a personal mission to remind his town of the importance of nature. O'Hare, determined not to have trees undercut his business, takes heavy-handed steps such as covering Audrey's nature paintings, closing off the door that Ted uses to see the Once-ler and forcibly searching Ted's room for the seed. Ted enlists his family and Audrey to help plant the seed, which has begun to germinate after coming into contact with water. O'Hare and his employees pursue the dissidents until they manage to elude him and reach the town center. Unfortunately, their attempt to plant the seed is interrupted by O'Hare who rallies the population to stop them. To convince them otherwise, Ted takes an earthmover and rams down a section of the city wall to reveal the environmental destruction outside. Horrified at the sight and inspired by Ted's conviction, the crowd defies O'Hare with his own henchmen expelling him from the town. The seed is planted, and Audrey kisses Ted on the cheek. Time passes and the land is starting to recover; the trees are regrowing, the animals are returning, and the redeemed Once-ler is happily reunited with the Lorax.