Woody, a pull-string cowboy doll, is the leader of a group of toys that belong to a boy named Andy Davis, and come to life whenever they want but chose to stay inanimate when humans are around. With his family moving to a new home and having a party, both one week before his birthday, the toys stage a reconnaissance mission to discover Andy’s new presents. Andy receives a space ranger Buzz Lightyear action figure, whose impressive features soon see him replacing Woody as Andy’s favorite toy. Woody is disappointed and resentful at his replacement, while Buzz does not understand that he is a toy, believing himself to be a real space ranger, and sees Woody as an interference in his mission to return to his “home planet”. The toys later find out that Andy’s next door neighbor, Sid Phillips, has been kicked out of summer camp and Rex, another of Andy’s toys, explains to Buzz that Sid tortures and destroys toys just for fun.
As Andy prepares to go to a family outing at the space themed Pizza Planet restaurant with Buzz, Woody attempts to have Buzz misplaced, but ends up knocking him out the window instead, causing the other toys to think that Woody tried to get rid of him. With Buzz missing, Andy takes Woody with him to Pizza Planet instead. Buzz, however, climbs aboard the car and confronts Woody as they stop at a gas station. The two toys fight and accidentally land outside the car, which drives off and leaves them stranded. Woody spots a truck bound for Pizza Planet and plans to rendezvous with Andy there, convincing Buzz to come with him by telling him it will take him to his home planet. Once at Pizza Planet, Buzz makes his way into a claw game machine shaped like a spaceship, thinking it to be the ship Woody promised him. While Woody clambers in to try and rescue him, they happen to get captured by Sid.