Dory, the regal blue tang, gets separated from her parents, Jenny and Charlie, as a child. As she grows up, Dory attempts to search for them, but gradually forgets them due to her short-term memory loss. Later, she joins Marlin the clownfish, looking for Nemo.
One year after meeting Marlin and Nemo, Dory is living with them on their reef. One day, Dory has a flashback and remembers her parents. She decides to look for them, but her memory problem is an obstacle. She suddenly remembers that they lived at the "Jewel of Morro Bay, California" across the ocean when Nemo mentions the name.
Marlin and Nemo accompany Dory on her journey. With the help of Crush, their sea turtle friend, they ride the California Current to California. Upon arrival, they explore a shipwreck full of lost cargo, where Dory accidentally awakens a giant Humboldt squid, who pursues them and almost devours Nemo. They manage to trap the squid in a large shipping container, and Marlin berates Dory for endangering them. Her feelings hurt, Dory travels to the surface to seek help where she is captured by staff members from the trio's nearby destination, the Marine Life Institute.
Dory is placed in quarantine and tagged. There she meets a grouchy but well-meaning seven-legged octopus named Hank. Dory's tag marks her for transfer to an aquarium in Cleveland. Hank, who fears being released back into the ocean, agrees to help Dory find her parents in exchange for her tag. In one exhibit, Dory encounters her childhood friend Destiny, a nearsighted whale shark, who used to communicate with Dory through pipes, and Bailey, a beluga whale, who mistakenly believes he has lost his ability to echolocate.
Dory subsequently has flashbacks of life with her parents and struggles to recall details. She finally remembers how she was separated from her parents: she overheard her mother crying one night, left to retrieve a shell to cheer her up, and was pulled away by an undertow current out into the ocean.