Dr. Jumba Jookiba, the ingenius (but socially-deviant) creator of an extremely destructive, weaponized living creature known only as “Experiment 626”, is arrested and taken to trial before the Grand Councilwoman of the Galactic Federation for “illegal genetic experimentation”. Brought before the court as evidence is the creature itself, whose behavior disgusts and alarms those in attendance. Dr. Jumba is found guilty by the court and sentenced to prison, while the court determines that Experiment 626 is far too dangerous to be kept around civilization and must be disposed of to protect the Federation from potential harm. 626 is taken by Captain Gantu to be exiled to an isolated, desolate asteroid to prevent him from causing untold destruction and chaos.
Experiment 626 escapes from his restraints aboard Gantu’s vessel, and subsequently manages to escape in a spaceship and activate the hyperdrive, causing its guidance systems to randomly set a course for Earth. The Grand Councilwoman calls forth Agent Pleakley, an expert on Earth, for advice on how to deal with the situation. After learning that the Earth is a protected planet that houses the endangered mosquito population, the Councilwoman dispatches Jumba and Pleakley to safely and quietly retrieve 626, in exchange for Jumba’s freedom. 626 successfully lands on the Hawaiian island of Kauaʻi, where he is promptly knocked unconscious by three passing trucks and taken to an animal shelter.
Meanwhile, Lilo Pelekai, an unruly and socially outcast child, struggles to fit in and constantly gets in trouble with her older sister and guardian, Nani. A social worker named Cobra Bubbles expresses increasing concern that Nani has not been able to take adequate care of Lilo and gives her three days to prove she can take good care of Lilo. Seeking a change, Nani decides that she will allow Lilo to adopt a dog and they go to the animal shelter, where Lilo immediately takes a keen interest in 626, who is impersonating a dog in order to escape. Lilo names 626 “Stitch” and shows him around the island. Stitch’s antics cause Nani to lose her job, which lands her in trouble with Cobra, who tells her he cannot ignore her being jobless. Upon meeting Stitch, Cobra also orders Lilo to turn him into a “model citizen.” As Nani attempts to find a new job, Lilo tries educating Stitch about Elvis Presley, whom she calls a “model citizen”. Despite this, however, Stitch’s antics, which include foiling Jumba and Pleakley’s attempts to capture him, ruin Nani’s chances of getting a job every time.
David, a friend of Nani’s, invites Nani and Lilo to take a break and enjoy a day of surfing. While Nani, Lilo, and Stitch ride on a huge wave, Jumba makes one final effort to capture Stitch from underwater, causing Nani to wipe out, and Stitch unintentionally pulls Lilo down with him. Although everyone gets safely to shore, Cobra witnesses this unfortunate event, telling Nani that although she means well, Lilo’s best interests mean she has to be placed in foster care. That night, after seeing how much trouble he has caused, Stitch leaves. Meanwhile, the Councilwoman, having lost patience with Jumba and Pleakley, fires the duo from their mission and reassigns it to Captain Gantu, inadvertently freeing Jumba to pursue Stitch by using instant but very dangerous capture methods.
The next morning, David tells Nani of a job opportunity, which Nani rushes to pursue. Stitch, hiding in the nearby woods, encounters Jumba, who chases Stitch back to Lilo’s house. The two fight, destroying the house in the process. Cobra arrives before Nani can return, attempting to take Lilo away. As Nani and Cobra argue, Lilo runs away and encounters Stitch, who reveals his true form just moments before they are abducted by Gantu. Stitch escapes as the ship takes off, with Lilo still aboard. As Stitch tries to explain everything to Nani, he is captured by Jumba and Pleakley. Nani demands that they had better rescue Lilo, but Jumba states that they can’t, as they’re only there for Stitch. Nani breaks down over losing her sister, but Stitch manages to tell Nani about ʻohana, a term for “family” that he learned from Lilo. After convincing Jumba to help rescue Lilo, Jumba, Pleakley and Nani give chase in Jumba’s spaceship. Meanwhile, Stitch hijacks a tanker truck full of gasoline and drives it into a volcano, using the explosion to launch himself into Gantu’s cockpit, distracting Gantu enough to crash-land the ship and rescue Lilo.
Back on land, the Grand Councilwoman arrives and fires Gantu from his job. As Stitch is being taken into custody, he explains that he has found a family in Nani and Lilo. Seeing that Stitch has become a civilized creature, the Councilwoman has trouble with incarcerating Stitch again. At the advice of Cobra, Lilo shows her the adoption paper for Stitch, declaring she owns him and that taking him would be theft. The Councilwoman, before leaving, decrees that Stitch will be exiled on Earth and entrusted into the care of Lilo and Nani, and asks Cobra, who reveals himself to be a former CIA agent who previously convinced the Federation that mosquitoes were an endangered species (which was why Pleakley became obsessed with mosquitoes), to keep an eye on them. Together with Jumba and Pleakley, whom were purposely left behind, the house is rebuilt, and the two happily become members of Lilo and Stitch’s family as well.