The movie begins with two announcers, preparing for the opening of the Dinoco 400, the final race in the Piston Cup Series, the most famous and prestigious race in the United States. So far in this racing season, three racers have emerged as the most likely candidates for the Piston Cup Championship, with all three of them tied for the season point's lead. Skip Weathers, AKA "The King," a longtime racing veteran who already has seven Piston Cups to his name and is rumored to be retiring at the end of the current season. Chick Hicks, another veteran racer and long time second fiddle, spending his entire racing career coming in second behind The King. Lastly, Lightning McQueen, a talented but cocky and overconfident rookie with this being his first year in the racing circuit and showcasing an incredible performance. Speculation is that he might be the first racer to win the Piston Cup, Rookie of the Year, and Dinoco sponsorship in one sweep.
The event intensifies the rivalry between the three racers. Lightning is desperate to win and gain a spot on the prestigious Dinoco team, but he struggles with teamwork due to his self-centered attitude. During the high-stakes race, Hicks, being willing to do anything to succeed, sideswipes another racer, causing a multicar pileup. Lightning is barely able to weave through the wreckage and keep up with the lead cars. Then, to cement his hold on the lead, McQueen stays out on the lead lap while everyone else pits. The commentators mention that McQueen has recently fired his third crew chief, offering the explanation that Lightning prefers to work alone.
Throughout the race, Lightning refuses to make complete pit stops, taking only a few seconds each lap to refuel. This strategy backfires on the last lap when his rear tires explode. McQueen makes an effort to get across the line first, but the race ends in a three-way tie. Reporters interview Lightning while the judges argue over the result. McQueen repeats that he is a "one-man show." His pit crew, fed up with Lightning's shoddy treatment, quit in the middle of the interview. Chick and Lightning trade insults until The King comes over to have a word with Lightning. The King tells McQueen that his talent is extraordinary, but that his attitude is horrible and that Lightning can't win without a good team behind him, but Lightning dismisses him. Lightning's idea of a good team is Dinoco, the most prestigious sponsor on the racing circuit and The Kings' current sponsor. Lightning is certain that if he wins the Piston Cup he will be offered the chance at a Dinoco sponsorship.
An announcement regarding the outcome of the race comes over the loudspeakers. Officials declare that a decisive tiebreaker race between Chick, Lightning and The King will be held in California at the Los Angeles International Speedway in one weeks time to determine the championship.
Lightning meets with his transporter, Mack, after the announcement. Mack reminds McQueen that he needs to make a personal appearance for his sponsor, Rust-Eze. Lightning films a commercial for Rust-Eze and talks to a group of rusted vehicles brought to the personal appearance by Rusty & Dusty, heads of the company. McQueen forcibly puts on a good face for the crowd but is obviously unhappy working for a small-time group, believing himself to be worth more.
After the race and on the road with Mack, Lightning is impatient and desperate to be the first competitor to arrive at California. He refuses to let Mack stop off and rest, forcing him to drive on through the night. While on Interstate 40, Mack is confronted by a gang of street racers while he is drowsy, who force him onto the shoulder. The vibration from the rumble strips accidentally causes a Lightning figurine to land on the button that opens the back door of the truck, leading to Lightning falling out along with his car. Lightning, terrified about being lost and losing time, desperately rushes to try and find Mack but ends up leaving the highway at the next exit and following a semi that he thinks is Mack but turns out to be some other driver, who rudely tells McQueen to turn on his headlights.
While Lightning is speeding, he gets lost in the dark country roads. He passes a police car waiting in a speed trap, who pulls out and chases after Lightning. Lightning floors it when he hears the police car backfiring, believing that he is being shot at. Lightning loses control of his vehicle, spinning wildly and becoming entangled in several power lines. He tears through a small town and ends up shredding a large gash down the main street before finally coming to a stop in front of the Sheriff.
The next morning, Mack arrives at the track alone and a huge manhunt begins to try and find Lightning McQueen. Lightning wakes up the next morning and finds his car in an impound lot strapped with a parking boot and he is confronted by a tow truck driver in a rusty vehicle named Mater. Mater tells Lightning that he is in the town of Radiator Springs, just off old U.S. Route 66. The Sheriff shows up to take Lightning to court for his actions.
The other citizens of Radiator Springs- Fillmore, who owns a shop selling his own organic food; Luigi and Guido, who run a tire shop; Ramone, who runs a beauty salon, tattoo parlor, and a car paint shop; Flo, who runs a gas station and cafe; Sarge, who sells surplus military goods; Lizzie, an antiques dealer; and Red, the town's fire chief and now sole firefighter- have all turned out to demand punishment for Lightning's reckless driving, which caused a large amount of damage to the town.
The town's physician and judge, Doc Hudson, arrives to try McQueen's case. At first, Doc is ready to impose serious hard time on him but upon getting a closer look at Lightning orders him thrown out of town. A woman interrupts the judge's rulings, and Lightning and immediately starts crushing. But the newcomer, Sally Carrera, is the town's attorney. Sally persuades Doc to sentence Lightning to community service and repair the damage to the road. Doc relents, telling Lightning that he will be set free once the road is finished, which should take five days by his estimate.
When Mater brings out Bessie, a massive asphalt paving machine, Lightning makes a break for it, but Lightning only makes it a few miles out of town before he collapses from the heat and exhaustion. Sally and the Sheriff catch up to him and laugh at his attempt, before dragging him back to the town. The townsfolk watch as Lightning begins repaving the road. Lightning tries to convince them of his fame in his vanity and in the hopes of being set free. He almost convinces Luigi by mentioning his status as a racer, but Luigi loses interest soon after when it turns out he only cares about meeting a real Formula One racer.
Lightning, remembering that the deal was that he goes free when the road is done, chooses to do a shoddy job and drives the paving machine at full throttle, racing down the road and creating an uneven and bumpy finish. The townspeople are insulted by his awful attitude and poor work. Doc goads Lightning into accepting his challenge to a race, and if Lightning wins, he goes free. If Doc wins, Lightning has to scape off the current layer of pavement and do the road all over again. Lightning, arrogantly believing Doc to not be a threat and assured of his victory, accepts. At a dirt course on the outskirts of the town, Lightning rockets off from the starting line, but Doc doesn't even move. As he speeds into the first turn of the course, Lightning's tires fail on the dirt and he crashes. Doc wins by default. Lightning reluctantly turns to work at scraping up the pavement, grumbling and complaining the whole time. Several of the townsfolk offer Lightning their services, but Lightning is too frustrated with his situation to accept anything from them.
By the next morning, Doc finds that the road is about 1/3rd finished. Doc meets with the Sheriff, who confirms that Lightning ran out of asphalt while working and spent the rest of the night trying to make the turn that caused him to wreck the day before. Doc confronts Lightning, suggesting that he "turn right to go left." Lightning, extremely skeptical, tries it, but it backfires and sends him back over the edge of the cliff.
Lightning goes back to repaving the road when his car, still impounded, begins suffering a slow leak in one tire. Guido begins to fix it, and Luigi explains that Guido dreams of working at a real racetrack pit stop. Sally, impressed by Lightning's work and his effect on the town, offers Lightning a place at her motel rather than another night at the impound with his car. Lightning, being a smarmy little bastard, can't resist the opportunity to refuse.
The Sheriff places Mater in charge of watching Lightning for the next night. Mater takes McQueen out to a remote field, where they go cow tipping. Mater gives a demonstration of it, but is unable to tip more than one cow at a time. Lightning revs the car engine and causes every single cow to tip over. They are almost caught by Frank, the farmer who owns and oversees the cows, and have to speed away. On the way back to town, Mater shows off his skills as "the world's best backwards driver," a talent that stuns Lightning. Mater proclaims Lightning to be his best friend, and Lightning seems to be genuinely touched by the affection.
The next morning, Lightning waits at Doc's garage to meet with him. While waiting, he wanders into a dusty workshop belonging to Doc and finds several Piston Cup trophies on the floor, and racing memorabilia. A newspaper on the floor shows that Doc is actually the legendary Hudson Hornet, a legendary racer who still holds the record for most wins in a single season, with 27 in 1952 alone. But Doc refuses to talk about his racing career. To him, the trophies are "just a bunch of empty cups," which baffles Lightning, as it's all he thinks about.
Sally takes Lightning on a tour of the surrounding landmarks and explains the history of the town. Route 66 used to be the main transportation road, and Radiator Springs was once a famous stop along U.S. Route 66, but Radiator Springs was bypassed when Interstate 40 was constructed in order to save ten minutes of travel time. Now the once thriving town is floundering and almost nobody comes through anymore. But Sally also expresses her dreams of reviving Radiator Springs.
Unfortunately, Lightning and Mater's actions of the previous night cause trouble when the cows start stampeding through the town. As he helps round them back up, Lightning spots Doc on the race course outside of town. Doc speeds through, easily making the turn Lightning couldn't. McQueen confronts Doc about his racing and why Doc didn't continue his racing career if he's so talented. Doc finally comes clean. He didn't quit, but he was forced into retirement after a terrible wreck forced him to sit out an entire season. When he had the chance to return, the sponsors passed him over to a hotshot rookie just like McQueen.
The next day everyone wakes up to find the road has been finished. Lightning now has his chance to leave, but instead chooses to stay behind and accept the services of the townsfolk, including having his car being revamped by them. As the town celebrates into the night over the completion of their new road, a swarm of reporters and media vehicles swarm in to reclaim McQueen. Before he can explain anything or talk to any of the townsfolk, Lightning and his car are loaded back onto Mack and sent off to California. Sally learns that Doc was the one who alerted the media to Lightning's location and is furious at his actions.
Lightning arrives in California and begins preparing for the big race, with Mack serving as his pit crew. The King and Chick Hicks get off to a decent start, but Lightning's memories of and mental fixation on Sally and his time in Radiator Springs are interfering with his performance and cause him to lose time. As McQueen tries to pull himself together, Doc's voice comes out on McQueen's radio. He and most of the other Radiator Springs residents have come to cheer on Lightning and serve as his pit crew, with Doc serving as crew chief. Cameras in the crowd spot Doc and recognize the legendary Hudson Hornet has come out of retirement.
Lightning rockets out of the pit area, desperate to catch up to the others. As the laps wind down, Chick makes contact with Lightning and causes him to spin out. But moments later, Chick is surprised when Lightning zooms passes him, driving backwards. Hicks then tries to force McQueen off the road, causing Lightning to blow a tire. Guido prepares for Lightning's arrival, then completes the fastest pit stop in Piston Cup history by speed-changing all four tires in seconds single-handedly, shocking Chick's pit crew and Guido proudly tells off Chick's crew.
The three racers are down to the last lap as Lightning begins pulling into first place. Chick smashes Lightning once again, sending him careening off the track. Lightning, however, takes the lead by turning his tires hard to the right while sliding left and reclaims the lead position. In a desperate attempt to win, Chick sideswipes The King, sending him flipping multiple times through the air and landing, with his car heavily battered and damaged on the infield. Lightning screeches to a halt a few feet short of the finish line when he sees the King's state, remembering what happened to Doc. Chick speeds across for first place. Lightning goes back and helps push the King the rest of the way to the finish line, letting him finish his last race with dignity. When Skip tells Lightning he gave up an easy victory, Lightning tells the King that the prize is "just an empty cup," echoing Doc's sentiments. Chick Hicks is given the Piston Cup, but he is jeered and taunted by the crowd for his actions, making it a hollow victory at best, while Lightning is cheered and congratulated for his act of good sportsmanship. Tex Dinoco, head of the Dinoco company, offers Lightning a sponsorship. Lightning considers, but decides to stay with Rust-Eze because they gave him his big chance.
Back in Radiator Springs, Guido and Luigi are dumbfounded when an actual Ferrari shows up at their store, because McQueen said it is the best place in the world to get tires. Lightning moves back to Radiator Springs, reuniting with Sally and decides to place his headquarters in the town while training under Doc's mentorship, making the location famous once more and having the maps redrawn as "Historic Route 66."
A series of mid credit scenes show what happens to Radiator Springs afterwards, with Flo's café full of customers, while customers fill into Ramone's shops for her work on their cars or bodies. A museum of Doc Hudson's racing days opens. The King and his wife, as well as fellow racer Junior in there. Everyone else also finds more success in Radiator Springs. The street racers who were responsible for McQueen's dilemma are caught by the Sheriff speeding near Radiator Springs. Their cars are locked into an impound lot and they are sentenced to paving the roads with Bessie. The Radiator Springs Drive-In Movie Theater opens, and shows car versions of popular Lucasfilm/Dreamworks/Pixar movies.
