Plot

A group of sentient toys, who pretend to be lifeless when humans are around, are preparing to move into a new house with their young owner Andy Davis (John Morris), his infant sister Molly (Hannah Unkrich), and their single mother Mrs. Davis (Laurie Metcalf). Andy's birthday is also coming up and Mrs. Davis is throwing a party for the same. Sid (Erik Von Detten) is Andy's next-door neighbor and bully, who destroys toys for fun. Hannah (Sarah Freeman) is Sid's friendly sister.

Learning that Andy's birthday party has been unexpectedly moved to that very day, several toys - including Mr. Potato Head (Don Rickles) a cynical potato-shaped doll with put-together pieces on his body, Slinky Dog (Jim Varney) a dachshund slinky toy and Woody's second-in-command, Rex the tyrannosaur (Wallace Shawn) a nervous green Tyrannosaurus figurine, Hamm (John Ratzenberger) a smart talking piggy bank, and Bo Peep (Annie Potts) a porcelain shepherdess doll and Woody's love interest become concerned that Andy might receive something that will replace them. Woody, a pull string cowboy doll, and Andy's favorite toy and their leader, is the only toy who gets to say his own lines because he has a pull-string that makes him say things.

Woody starts by reminding them all to find a moving buddy so they don't get lost when the Davis family moves to their new house, which will happen in a week. Then he tries to downplay the news that Andy's birthday party is happening today, but it causes a commotion as the toys know that Andy's actual birthday isn't till next week. Rex worries that someone will give Andy another dinosaur, and many of the toys have similar concerns. He's interrupted when Hamm the piggy-bank, stationed near the window, announces that the guests are arriving. The toys rush to the window to see the presents the kids are bringing; the bigger boxes make them especially nervous.

To calm them, Sheriff Woody (Tom Hanks) sends Sarge (R. Lee Ermey) the leader of a large troop of plastic green army men, and his green army men to spy on Andy's birthday party with a baby monitor. At first, the presents seem nonthreatening including a lunchbox, bed sheets and a Battleship game. Andy receives a space ranger Buzz Lightyear (Tim Allen) a Space Ranger Universe Protection unit action figure, whose interesting features threaten Woody's position as Andy's favorite toy. The new toy has taken Woody's place on the bed, which causes consternation. Woody reminds them that no one is being replaced.

Buzz does not realize that he is a toy when Woody attempts to convince him and thinks that he is a real space ranger. Buzz believes he's crash landed on a strange planet on the way to sector 12, and his ship is damaged. The toys impressed with Buzz's features including a laser (a little light bulb that blinks), and wings. Buzz takes exception to being called a toy, and when Woody says he can't really fly, Buzz climbs the bedpost, shouts "to infinity and beyond!", and dives. He bounces off a rubber ball, does a loop-De-loop on the racetrack, and gets stuck for a few rotations on the toy plane tethered to the ceiling before flipping down and landing neatly back on the bed. While the other toys befriend Buzz, Woody becomes jealous of him and starts to feel left out when Andy starts going to sleep with Buzz.

Andy has Buzz shoot Woody, then puts on a cardboard replica of Buzz's helmet and wings. A western-themed poster in Andy's room is replaced by two Buzz Lightyear posters, and drawings of Woody on the bulletin board are covered with drawings of Buzz. The western-style bedspread disappears, and the new one is emblazoned with Buzz's image and his name. In the final indignity, Andy takes Buzz to bed and leaves Woody in the covered wagon toy chest.

Two days before the move, Andy's family plans for a dinner at Pizza Planet and Andy is told that he can bring one toy with him. Andy prepares to go to a family outing at a space-themed Pizza Planet restaurant with Buzz. Still wanting to stay close to Andy, and still jealous of Buzz, Woody tries knocking Buzz behind the desk with RC, the radio-controlled car. Andy's attempt starts a chain reaction that knocks Buzz out a window instead into Andy's next-door neighbor, Sid Phillips yard. However, most of the other toys believe Woody has deliberately killed Buzz.

With Buzz missing, Andy takes Woody to Pizza Planet with him instead. However, Buzz climbs into the car and confronts Woody when they stop at a gas station. The two toys fight and accidentally fall out of the car, which drives off and leaves them behind. Woody sees a pickup truck bound for Pizza Planet and plans to rendezvous with Andy there, convincing Buzz to come with him by saying that the pickup truck can take him to his home planet. They reach Pizza Planet and hide in discarded food packaging so they can sneak through the front door. Woody quickly spots the Davises. Once at Pizza Planet, Buzz makes his way into a claw game machine shaped like a spaceship, thinking that it is the ship that Woody had promised him to take him back home. Inside, he finds a horde of squeaky aliens (Jeff Pidgeon) who revere the machine's claw arm as their master. When Woody follows Buzz into the game to try to rescue him, the two of them are captured by Sid, who likes to torture and destroy toys for fun. Sid takes them back to his house. Sid immediately gives the three-eyed alien to his vicious dog, Scud, who starts chewing on it.

At Sid's house, the two toys stage numerous attempts to escape before Andy's moving day, encountering nightmarish Hodge-Podge toys of Sid's creation. There's an erector-set spider with a one-eyed baby head, a jack-in-the-box whose jack has been replaced by a green rubber hand, a fishing pole with legs, and other horrors. Buzz thinks they're cannibals.

Next morning, Sid interrogates Woody about the location of a "rebel base." When Woody remains silent, Sid uses a magnifying glass to concentrate the sunlight on a spot between Woody's eyebrows, which starts to smoke. Woody is saved when Sid is called away to eat his Pop-tarts. Buzz compliments Woody for not succumbing to Sid's torture. Buzz tries his laser on them and is puzzled when it doesn't work. Woody pushes the button that activates Buzz's karate-chop action and frog-marches him through the crowd of toys, which parts to let them through.

In the living room, the TV is on and Buzz sees a commercial for Buzz Lightyear action figures just like himself and realizes that Woody was right about him being a toy. Unable to face the truth, Buzz tries to prove he is still a space ranger by attempting to fly out of the window but falls and loses one of his arms. Buzz falls into depression over the truth, making him unable to participate in Woody's escape plan which forces Woody to try and get the other toys attention in Andy's room by waving Buzz's disconnected arm, but the other toys leave him behind as they still resent Woody for what happened to Buzz.

Woody realizes that Sid's mutant toys are friendly when they fix Buzz's arm, but is still unable to make Buzz co-operate, forcing him to leave him behind and hide when Sid arrives. Sid prepares to destroy Buzz by strapping him to a rocket but is delayed by a thunderstorm and sleeps for the night.

Next door, it's Andy's bedtime and he's mourning the loss of his two favorite toys. His mom comes in and says she's looked everywhere, and all she can find is his hat, which she gives him. Andy's mom reassures him that they'll find Woody and Buzz before they move out the next day.

Woody convinces Buzz life is worth living even if he is not a space ranger because of the joy he can bring to Andy, and helps Buzz regain his spirit. Sid takes Buzz out to blow him up, but Woody rallies the mutant toys to come to life in front of Sid and frighten him into never harming toys again.

Woody outlines a plan and assigns tasks to each toy. Ducky and Legs go into the heating ducts to avoid Scud, who saw Woody trying to follow Sid and is still growling outside the bedroom door. Ducky and Legs get outside by removing the light fixture on the front porch, then ring the doorbell. When he hears the doorbell, Woody releases a wind-up frog from Sid's room. The frog scoots under Scud and zooms down the hall. Scud gives chase and follows the frog downstairs, where Hannah's answering the door. The frog goes out, Ducky grabs it, and they're both reeled up by Legs (who's part fishing pole) before Scud catches up. Hannah, exasperated, shuts the door, leaving Scud outside. The porch light fixture drops back into place before anyone notices it's gone.

As soon as Hannah's out of the front hall, Woody and his cadre of toys come down the stairs, roll through the kitchen, and exit through the cat flap in the back door. They land in the bushes, where they have a good view of the launch site. Sid's newscaster voice is asking his mission control voice if launch pad construction is complete; mission control says it is. Sid himself is out of sight, apparently rummaging around in the shed looking for matches. Ducky, Legs, and the wind-up frog pop out of a down-spout as Sid prepares to start the count-down.

The launch pad looks very strange. Buzz and his rocket are standing on a dart board on a milk crate. Nearby is an orange-striped traffic horse with a rake leaning on it and the empty water jug propped underneath. The jug is connected with vacuum-cleaner hose to a red funnel, which is aimed at Buzz's feet.

Woody approaches Buzz, who's happy to see him and asks for help getting loose. Sid tosses Woody on the charcoal grill. He puts a match in Woody's holster and turns back to his rocket launch, where he lights another match and starts counting down from 10. While he's focused on this, toys are taking up positions all around the yard.

Before Sid can light Buzz's fuse, Woody's voice recordings start playing, one after another. Sid is distracted and comes over to pick Woody up off the grill. His string hasn't been pulled. A large toy pickup truck emerges from a pile of sand while a couple of partially dismembered soldier action figures rise out of a puddle.

They all advance on Sid, who backs away and jumps when the three-eyed alien from Pizza Planet pops out from under Scud's red water bowl. Sid backs toward the clothesline and the baby-headed spider drops down on his head. He shrieks and shakes it off, but the toys have him surrounded. Sid is panic-stricken. He screams, throws Woody in the air, and runs into the house, where he tells Hannah the toys are alive.

Woody and Buzz miss Andy's car as it drives away to his new house. Now freed, Woody and Buzz pursue the Davis's moving truck, but Scud attacks Woody. Running down the road, they climb onto a moving truck, but Scud chases them. Woody can't hold on to the truck and tells Buzz to take care of Andy for him. Buzz, sacrificing himself to save Woody, jumps on Scud's head, making him let go of Woody.

Woody attempts to rescue Buzz with Andy's RC car but the other toys, who think that Woody got rid of RC, toss Woody off onto the road. RC sweeps Woody off his feet and Woody turns RC up to turbo so they can catch up to the moving truck. Spotting Woody driving RC back with Buzz alive, the other toys realize their mistake and try to help them into the truck. When RC's batteries become depleted, RC coughs to a stop in the middle of the road as the moving van disappears in the distance. Then Buzz remembers he still has a rocket strapped to his back, and Woody remembers he still has the match Sid put in his holster.

Woody ignites the rocket on Buzz's back and manages to throw RC into the moving truck just in time before they go soaring into the air. Buzz then opens his wings to cut himself free before the rocket explodes. They pass the truck again and fall through the minivan's sunroof, landing neatly in the box next to Andy, who finds them and gleefully tells his mom. She assumes they've been in the car the whole time.

On Christmas Eve at their new house, Buzz and Woody stage another reconnaissance mission to prepare for the new toy arrivals, one of which is a Mrs. Potato Head, much to the delight of Mr. Potato Head. Woody jokingly asks Buzz "What could Andy possibly get that is worse than you?", a question which is immediately answered. Andy's new gift, as it turns out, is a puppy, and the two share a worried smile.