The film is set in a post-ice age North America, where the local tribesmen believe all creatures are created through the Spirits, who are said to appear in the form of an aurora. Three brothers (Kenai, the youngest brother; Denahi, the middle brother; and Sitka, the eldest brother) return to their tribe in order for Kenai to receive his totem, a necklace in the shape of an animal. The particular animal it represents symbolizes what he must achieve to call himself a man. Unlike Sitka, who gained the eagle of guidance, and Denahi, who gained the wolf of wisdom, Kenai receives the bear of love. He objects to this, stating that bears are thieves, and believes his point is made a fact when a bear takes some salmon. Kenai and his brothers pursue the bear, but a fight follows on a glacier, during which Sitka gives his life to save his brothers, although the bear survives. Angered, Kenai heads out to avenge Sitka. He chases the bear up onto a mountain and kills it. The Spirits, represented by Sitka’s spirit in the form of a bald eagle, transform Kenai into a bear after the dead bear’s body evaporates. Denahi arrives, mistaking Kenai as dead, and believing his bear form is responsible, vows to avenge Kenai by hunting it down.
Kenai falls down some rapids, survives, and is healed by Tanana, the shaman of Kenai’s tribe. She does not speak the bear language, but advises him to return to the mountain to find Sitka and be turned back to normal, but only when he amends his mistake; she disappears without an explanation. Kenai quickly discovers the wildlife can talk, meeting two brother moose, Rutt and Tuke. He gets caught in a trap, but is freed by an outgoing bear cub named Koda. They make a deal: Kenai will go with Koda to a nearby salmon run and then the cub will lead Kenai to the mountain. As the two eventually form a sibling-like attachment, Koda reveals that his mother is missing. The two are hunted by Denahi, who is still determined to avenge Kenai, unaware that the bear he is pursuing is actually Kenai. Eventually, Kenai and Koda reach the salmon run, where a large number of bears live as a family, including the leader Tug, a grizzly bear. Kenai adjusts to his surroundings and is happy living with the other bears. During a discussion among the bears, Koda tells a story about his mother fighting human hunters, making Kenai realize that the bear he killed was Koda’s mother.
Shocked and anxious, Kenai runs away, but Koda soon finds him. Kenai reveals the truth to Koda, who runs away, grief-stricken. An apologetic Kenai leaves to reach the mountain. Rutt and Tuke, having had a falling out, reform their brotherhood in front of Koda, prompting him to go after Kenai. Denahi confronts Kenai on the mountain, but their fight is interrupted by Koda, who steals Denahi’s hunting pike. Kenai goes to Koda’s aid out of love, prompting Sitka to appear and turn him back into a human, much to Denahi and Koda’s surprise. Though Koda can’t talk to humans, he doesn’t want Kenai to leave, because ever since he came into the cub’s life, he has been like a brother to him. However, Kenai asks Sitka to transform him back into a bear so he can stay with Koda. Sitka complies, and Koda is reunited briefly with the spirit of his mother, before she and Sitka return to the Spirits. In the end, Kenai lives with the rest of the bears and gains his title as a man, through being a bear.