Two ocellaris clownfish, Marlin and Coral, admire their new home in the Great Barrier Reef and their clutch of clownfish eggs when a barracuda attacks, knocking Marlin unconscious. He wakes up to find that Coral and all but one of the eggs have been eaten by the barracuda. Marlin names this last egg Nemo, a name that Coral liked.

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Following his birth, Nemo develops a smaller right fin due to damage to his egg, which limits his swimming ability. Worried about Nemo's safety, Marlin embarrasses Nemo during a school field trip. Nemo disobeys his father and sneaks away from the reef towards a boat, and is captured by scuba divers. As the boat departs, a diver accidentally knocks his diving mask overboard. While attempting to save Nemo, Marlin meets Dory, a good-hearted and optimistic regal blue tang with short-term memory loss. Marlin and Dory meet three Australian sharks—Bruce, Anchor, and Chum—who claim to be vegetarians. Marlin discovers the diver's mask and notices an address written on it. When he argues with Dory and accidentally gives her a nosebleed, the blood causes Bruce to lose control of himself and enter a violent feeding frenzy. The pair escape from Bruce, but the mask falls into a trench in the deep sea.

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During a hazardous struggle with an anglerfish in the trench, Dory sees the diving mask and reads the address located at 42 Wallaby Way, Sydney. As Dory finishes reading the address on the mask, Marlin is able to trap the Anglerfish using the eyepiece of the mask. To her own disbelief, Dory remembers the address on her own despite her short-term memory loss. The pair swims on, receiving directions to Sydney from a school of moonfish. After receiving directions from the moonfish, Marlin and Dory encounter a bloom of jellyfish that entraps them and nearly kills them. As a result, Marlin loses consciousness and wakes up on a sea turtle named Crush, who takes Marlin and Dory on the East Australian Current. Marlin tells the details of his long journey with a group of sea turtles, and his story is spread across the ocean. He also sees how Crush gets along well with his son Squirt.

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Meanwhile, Nemo is placed in a fish tank in the office of a dentist. He meets aquarium fish called the Tank Gang, led by Gill, a moorish idol. The fish learn that Nemo is to be given to the dentist's niece, Darla, who previously killed a fish by constantly shaking its bag. Gill then reveals his plan to escape, jamming the tank's filter with a pebble. The fish would be placed in plastic bags so that the dentist can clean the tank, and then they would roll out the window and into the harbor. Nemo attempts to jam the filter, but fails, almost getting himself killed in the process. Near the harbor, a pelican, Nigel, flies to the dentist's office and brings news of Marlin's adventure. Inspired by his father's determination, Nemo makes a second attempt to jam the filter. Unlike the first attempt, he is able to successfully render the filter useless, but to the tank gang's dismay, the dentist installs a new high-tech filter before they can escape.

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After leaving the Current, Marlin and Dory are engulfed by a blue whale. Inside the whale's mouth, Marlin desperately tries to escape, while Dory communicates with the whale, which carries them to Sydney Harbour and expels them through his blowhole. They meet Nigel, and after helping the pair escape from a massive flock of seagulls, he takes them to the dentist's office. Darla has just arrived and the dentist is handing Nemo to her. Nemo plays dead to save himself as Nigel arrives, causing Darla to scream. Upon seeing Nemo, Marlin mistakenly believes he is dead, before Nigel is violently thrown out. In despair, Marlin leaves Dory and begins to swim home. Gill helps Nemo escape into a drain that leads to the ocean. Dory loses her memory and becomes confused, and meets Nemo, who reaches the ocean. Eventually, Dory's memory returns after she reads the word "Sydney" on a drainpipe. She reunites Nemo with Marlin, but she is caught in a fishing net with a school of grouper. Nemo enters the net and orders the group to swim downward to break the net, enabling them to escape. After returning home, Nemo leaves for school, with Crush's son Squirt, and Marlin and Dory proudly watch Mr. Ray carry Nemo and his friends to school.

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In a pre-credits sequence, Aquascum, the high-tech filter in the dentist's fish tank breaks down, and the Tank Gang escape to Sydney Harbour, eventually realizing that they are still confined inside their (water-filled) plastic bags.