Carl Fredricksen, a shy and quiet young boy, meets an energetic and outgoing bucktoothed barefooted tomboy named Ellie, discovering they share the same interest in exploration as their hero, famed explorer Charles F. Muntz. Ellie expresses her desire to move her clubhouse to Paradise Falls in South America, a promise she makes Carl keep. Carl and Ellie wed and grow old together in the old house where they first met while making a living as a toy balloon vendor and a zookeeper respectively. Unable to have children, they also try to save up for the trip to Paradise Falls but other financial obligations arise. Just as they seem to finally be able to take their trip, Ellie dies of old age, leaving Carl living alone in their home as a sour recluse with nothing to live for and missing his wife terribly. As the years pass, the city grows around Carl's house with construction as Carl refuses to move. After a tussle with a construction worker over Carl's broken mailbox, the court orders Carl to move into Shady Oaks Retirement Home. Carl comes up with a scheme to keep his promise to Ellie, and uses his old professional supplies to create a makeshift airship using tens of thousands of helium balloons which lift his house off its foundations. Russell, a Wilderness Explorer trying to earn his final merit badge for "Assisting the Elderly", has stowed away on the porch after being sent on a literal snipe hunt by Carl the day before.

After a storm throws them around for a while, they find themselves across a large ravine facing Paradise Falls. With their body weight providing ballast allowing Carl and Russell to pull the floating house, the two begin to walk around the ravine, hoping to reach the falls while there's still enough helium in the balloons to keep the house afloat. As they walk towards Paradise Falls, Russell finds a colorful tropical bird which he names Kevin, not realizing that the bird is actually female. They later run into a dog named Dug with a translating collar that lets him speak. They discover Dug's owner is Charles Muntz, who has remained in South America for several decades to find and bring back a large species of bird (which turns out to be Kevin) in order to restore his reputation after bringing back a skeleton of the bird and being called a fraud because scientists thought he faked the evidence. Carl is initially thrilled to meet his hero, but when he realizes that Muntz is after Kevin and will kill without a moment's thought in order to capture her alive, Carl takes steps to save the bird and escape from Muntz. Thanks to Kevin and Dug they escape Muntz's pack of vicious dogs, led by Alpha, but Kevin is injured during the escape.

As Carl and Russell assist the injured Kevin to her chicks, Muntz and his dogs arrive in his airship, led by a tracking device in Dug's collar, and sets Carl's house on fire, forcing Carl to choose his house over Kevin. Muntz and his dogs quickly capture the bird and fly off. Though Carl successfully gets the house on the ground overlooking Paradise Falls per Ellie's wish, he has lost Russell's favor. Carl, settling down in his house, finds Ellie's childhood scrapbook and discovers her mementos of her life with Carl after they were married, and a final note from her thanking Carl for her adventure and an encouragement for him to go on his own. Invigorated by Ellie's last wish, he goes outside to see Russell, only to find him giving chase to Muntz. Carl lightens the weight of his house by dumping furniture and his possessions, allowing him to chase after Muntz in his house with Dug by his side.

Russell enters the airship through a window, but is captured by the dogs. He is tied up and left to fall to the earth, but Carl saves him and keeps him tied up in the house. Carl and Dug board the ship, and are able to lure the guard dogs away from Kevin to free her. Carl and Muntz duel face to face and fight (Muntz with a sword, Carl with his cane), while Dug is able to wrest control of the dogs and the dirigible from Alpha. Russell frees himself but clings to a lifeline as he finds the house in a dogfight with biplane fighters. When Carl shouts for help, Russell distracts the dog pilots and regains control of the house to rescue his friends, who are now on top of the airship. In pursuit, Muntz shoots out some of the balloons, causing the house to land and slide off the airship. Carl manages to trick Muntz inside the house while saving Russell, Dug, and Kevin; Muntz falls to his doom, while Carl's house drifts off into the clouds — a loss Carl gracefully accepts as being for the best.

Carl takes Muntz's dirigible and returns Kevin to her chicks, and then returns Russell and Dug back to the city. When Russell's father snubs his son's Senior Explorer ceremony, Carl fulfills that role himself to proudly present Russell with his final badge, the grape soda badge that Ellie presented to Carl when they first met. Afterward, Carl, reinvigorated in both spirit and body from his adventure, becomes a cheerfully active community volunteer with a strong father like relationship with Russell, Dug, and the other Wilderness Explorers. Whilst Carl now resides in the late Muntz's blimp, his old house, through happenstance, has landed exactly where Ellie envisioned it — overlooking Paradise Falls.