17-year-old Andy is about to leave for college, and his toys have not been played with for years. He intends to take only Woody with him, and puts Buzz Lightyear, Jessie and the other toys in a trash bag to be stored in the attic. Andy’s mother mistakenly takes the bag to the curb for garbage pickup. The toys escape and, believing Andy intended to throw them away, decide to climb into a donation box with Barbie bound for Sunnyside Daycare. Woody follows them, but is unable to convince them of the mistake.
Andy’s toys are welcomed by the other toys at Sunnyside, and are given a tour of the seemingly idyllic play-setting by Lots-O’-Huggin’ Bear (“Lotso”), Big Baby, and Ken. The toys choose to stay, except Woody, who attempts to return to Andy, but is instead found by Bonnie, one of the Sunnyside students. She takes Woody home and plays with him along with her other toys, which are well-treated. Meanwhile, at Sunnyside, a group of toddlers plays roughly with Andy’s toys. Buzz seeks out Lotso to request to have them moved to the older children’s room, but Lotso refuses. At the same time, Mrs. Potato Head, through an eye she inadvertently left in Andy’s room, sees Andy searching for the toys. However, before they can leave, Andy’s toys are imprisoned by Lotso’s gang, guarded by Buzz, whom Lotso switched to Demo Mode (which caused him to believe he is a real space ranger, therefore turning against the other toys). At Bonnie’s house, a toy clown named Chuckles explains to Woody that he, Lotso and Big Baby once had a beloved owner named Daisy. When the toys were accidentally left behind by Daisy’s family during a trip, they made their way back to her house, only to find that Lotso had been replaced.