In Rivet Town, Herb Copperbottom, a dishwasher at Gunk’s Greasy Spoon diner, races through the streets, elated that he is going to be a father. He and his wife, Lydia, after 12 hours of “labor”, construct the baby. He is named Rodney, and he becomes a young inventor who dreams of making the world a better place. Rodney idolizes Bigweld, a master inventor and owner of Bigweld Industries. During Rodney’s adolescence, he invents a gadget, “Wonderbot”, intended to help his father clean the dishes at the restaurant. When Herb’s supervisor unexpectedly confronts them, Wonderbot breaks dishes, causing Herb to be put in debt and Rodney to be dismissed. Rodney takes his invention to Robot City to see Bigweld and get a job as an inventor at Bigweld Industries, so that he can help his father pay back his supervisor. His father encourages him and confides that he has always regretted not pursuing his dream of becoming a musician. Rodney arrives in Robot City and meets Fender, a ramshackle robot who takes souvenir photos and sells maps to the stars’ homes. After a spectacular but harrowing ride on the crosstown express, Rodney arrives at the gate of Bigweld Industries.
However, he learns that Phineas T. Ratchet has taken over Bigweld Industries and is about to discontinue the manufacture of spare parts. Ratchet believes the company can make a bigger profit if it focuses on selling expensive upgrades; if the robots refuse, they are sent to the underground Chop Shop, where they are shredded and melted down by Ratchet’s evil mother, Madame Gasket. Rodney is forced out and shares quarters with Fender at Aunt Fanny’s low-rent boarding house, along with an assortment of other “Rusties” four other outmoded robots threatened with the Chop Shop (one of whom is Fender’s younger sister, Piper, who develops a crush on Rodney). When the news gets out that spare parts have been discontinued by Bigweld industries, Rodney remembers Bigweld’s slogan, “See a need, fill a need”, and begins fixing old robots on his own, who greatly thank him as a lifesaver. Upon discovering this, Gasket orders Ratchet to stop Rodney and kill Bigweld.
Rodney discovers Herb needs replacement parts. Rodney decides to contact Bigweld directly to beg him to restart the manufacture of spare parts. Wonderbot reminds him the annual Bigweld Ball takes place that night. Rodney and Fender go to the ball in disguise, only to hear Ratchet announce that Bigweld was unable to attend. Rodney confronts Ratchet, but security robots stop him. Cappy, a beautiful robot-executive who dislikes Ratchet’s scheme, saves him, and together with Fender and his new girlfriend, Loretta Geargrinder, they escape from the ball.
Fender walks Loretta home, but he is taken to the Chop Shop. While escaping, he loses the lower half of his body and reluctantly attaches a new pair of female legs. Meanwhile, Rodney and Cappy fly to Bigweld’s home. When Rodney inadvertently knocks over a domino, Bigweld appears. Rodney asks Bigweld to return to the helm of his company and once again make spare parts available, but Bigweld refuses. Rodney calls his parents, intending to give up his ambition of becoming an inventor and return to Rivet Town, but his father once again encourages Rodney to pursue his dreams. Rodney rallies the Rusties into fighting back against Ratchet. Fender reveals that Ratchet has built a fleet of super-sweepers with the intention of rounding up and destroying all older robots. Bigweld eventually comes with the group, having realized what Rodney meant to him.
At Bigweld Industries, Bigweld dismisses Ratchet, but Ratchet hits him over the head with a phone. This sends Bigweld insane and eventually leads into a chase. Bigweld is repaired just as they enter the Chop Shop but is captured. A desperate battle ensues between Gasket’s henchmen and Rodney’s repaired robots. During the chaos, Rodney rescues Bigweld, the choppers and sweepers are destroyed, Wonderbot kills Gasket by tossing her into the furnace, and Ratchet loses his upgrades. Bigweld goes to Rivet Town to tell Rodney’s parents that their son is now his right-hand inventor and eventual successor. Rodney makes his father’s dream come true by giving him a three-bell trumpet, and the audience dances to James Brown’s “Get Up Offa That Thing” as a victory celebration.