Eleanor and Frederick Little are intending to adopt a new family member. They go to an orphanage where they meet and adopt an anthropomorphic mouse named Stuart. However, Stuart is greeted coldly by their older son George, who refuses to acknowledge him as his brother, and the family's cat, Snowbell, who tries to eat him.

Stuart's life with the Littles gets off to a bad start when George unknowingly throws him down the laundry chute with his pajamas, causing Eleanor to put him in the washing machine, where he almost drowns, and in the process swallows a lot of detergent, making him very sick. He begins to feel like an outcast in the family when they bring him gifts and George snaps at them claiming that Stuart isn't his brother but simply a mouse. When Stuart admits he is lonely, the Littles ask Mrs. Keeper to find Stuart's real parents.

Stuart finally bonds with George when they start playing together and plan to finish George's remote-controlled racing sailboat, Wasp, for an upcoming boat race on Conservatory Water in Central Park. However, Monty, Snowbell's alley cat friend, visits the house and discovers Stuart. Snowbell later goes with Monty to an alley to meet with Smokey, an alley cat mobster working for a mafia gang of other alley cats, who agrees with Snowbell to have Stuart removed from the household at his request.

Stuart and George finish Wasp in time for the race, but on the day of the race, the controller is smashed by accident. Stuart pilots Wasp himself, but ends up in a tussle with a larger boat piloted by George's bully, Anton. Stuart manages to win the race, gaining George's respect. However, during the family celebration, the Littles are visited by a mouse couple, Camille and Reginald Stout, who claim to be Stuart's birth parents who sent him to the orphanage due to poverty. Reluctantly, Stuart leaves with the Stouts and George gives him his favorite toy car as a farewell gift.

Three days later, Mrs. Keeper arrives at their house and reveals the truth to the Littles that Stuart's real birth parents died many years ago in an accident at a supermarket. Realizing that the Stouts are imposters, the Littles call the police, who begin a search operation. However, it is revealed that the Stouts were actually sent by Smokey, who had tricked them into posing as Stuart's parents and forced them to abduct Stuart from the Little household with the intention of having him brought over to the alley cat gang so they can kill Stuart.

Snowbell talks with Smokey, who insists that he and his gang should kill Stuart instead and calls a meeting with Reginald. However, he and Camille have grown to love Stuart like the Littles did and reveal the truth to him. In Central Park, Stuart finds himself confronted by Smokey and his gang, who chase him through the park and into a sewer drain, where he manages to outrun them, but loses his car and luggage in the process. Stuart returns home, only to find that the Littles are already gone. Stuart enters the house where he meets Snowbell, who lies to him about the Littles enjoying themselves greatly since Stuart's departure. Feeling unwanted, a heartbroken Stuart leaves and becomes discouraged.

The Littles return home with no success in finding Stuart. Meanwhile, Smokey, Monty and the other alley cats manage to trace Stuart back to Central Park and bring Snowbell along for the hunt. Snowbell, having redeemed himself since he felt guilty over his selfishness, finds Stuart and rescues him from the cats while admitting that he lied. Although Snowbell defeats Monty and the other cats by snapping the tree branch on which they are standing, Smokey attempts to kill him upon discovering his betrayal, only for Stuart to intervene and save Snowbell by hitting Smokey in the face with another branch and knocking him out of the tree. Stuart and Snowbell eventually return home, where Stuart happily reunites with the Little family, telling them that Snowbell actually found him and helped him on the way back.