In Brazil, various exotic birds are smuggled out of the country. In Moose Lake, Minnesota, a crate with a male Spix’s macaw hatchling falls out of a truck and is found by a little girl named Linda Gunderson, who names him Blu. Over the next 15 years, Linda comes to own a bookstore. Highly domesticated and unable to fly, Blu is ridiculed frequently by the Canada geese that come by outside of Linda’s bookstore.
One day, ornithologist Túlio Monteiro invites Blu and Linda to Rio de Janeiro on the condition that Blu, who is the last male of his species, mates with a female macaw. Linda accepts and they fly to Rio, where Blu meets a red-crested cardinal named Pedro and his yellow canary friend Nico. At Túlio’s aviary, Blu meets Jewel, a fiercely independent Spix’s macaw longing to flee back to the wilderness. The macaws are captured by Fernando, an orphaned boy, and a sulphur-crested cockatoo named Nigel, both of whom work for a group of smugglers led by Marcel, who wants to leave the country as soon as possible to secure a black market deal regarding Blu and Jewel. While Fernando has second thoughts about his actions, Nigel tells the macaws that he desires to exact revenge on “pretty birds” after his role on a television program had been ruined by one. However, because of Blu’s familiarity with cages, they flee into the jungle. Fernando meets Linda and Túlio and helps them find the birds, while Blu and Jewel meet Rafael, a toco toucan, who offers to take them to his bulldog friend, Luiz, to remove their leg chain. He attempts to teach Blu how to fly, before they meet up with Pedro and Nico. Meanwhile, Nigel hires a horde of thieving marmosets led by Mauro to capture Blu and Jewel. Pedro and Nico then take the two birds to a Rio-style dance party, where they perform a duet and begin to fall in love, but encounter the marmosets in the process. The birds fight them off while the five escape on a tram. Fernando takes Linda and Túlio to the smugglers’ hideout, where they discover that the birds have already been moved out. Marcel explains that he will use the Rio Carnival parade to smuggle the birds to the airport, as the other streets have been blocked off for the festivities. Meanwhile, Blu and the others meet Luiz, who releases the chain holding Blu and Jewel. After the two get into a heated argument, they decide to go their separate ways.