In a world where toys are living things who pretend to be lifeless when humans are present, a group of toys, owned by six-year-old Andy Davis, are caught off-guard when Andy’s birthday party is moved up a week, as Andy, his single mother and infant sister Molly are preparing to move the following week. The toys’ leader and Andy’s favorite toy, an old-fashioned cowboy doll named Sheriff Woody organizes the other toys, including Bo Peep the shepherdess, Mr. Potato Head, Rex the Dinosaur, Hamm the Piggy Bank and Slinky Dog, into a scouting mission. Green army men, led by Sarge, spy on the party and report the results to the others via baby monitors. The toys are relieved when the party appears to end with none of them having been replaced, but then Andy receives a surprise gift – an electronic toy space ranger action figure named Buzz Lightyear, who believes that he is an actual space ranger.
Buzz impresses the other toys with his various features, and Andy begins to favor him, making Woody feel left out. As Andy prepares for a family outing at Pizza Planet, his mother allows him to bring only one toy along. Fearing Andy will choose Buzz, Woody attempts to trap him behind a desk, but ends up knocking him out a window instead, resulting in the other toys accusing Woody of murdering Buzz out of jealousy. Before they can exact punishment, Andy takes Woody instead and leaves for Pizza Planet. When the family stops for gas, Woody finds that Buzz has hitched a ride on the car as well, and the two fight, only to find the family has left without them. They manage to make their way to the restaurant by stowing away on a pizza delivery truck, where Buzz, still believing he is a real space ranger despite Woody’s attempts to convince him otherwise, gets them stuck in a crane game, where they are picked out by Andy’s destructive neighbor Sid Phillips.