Mike Wazowski, a young lonely monster who is despised by his fellow classmates due to the fact that he is not scary, aspires to become a scarer (a monster who enters the human world at night to scare children and harvest their screams for energy) after visiting Monsters, Inc., Monstropolis’ most profitable scaring company, on a school field trip.
Eleven years later, Mike is now a first-year scare major at Monsters University (similar to Brown University) where he meets and becomes friends with his new roommate, Randall Boggs, and James P. Sullivan, who becomes his bitter rival when Sulley tells Mike he hasn’t got what it takes and will never be a scarer.
Mike studies hard and excels, while the privileged Sulley, coming from a family of talented scarers, relies only on his natural ability and begins to falter. As the semester progresses, Mike and Sulley attempt to join a fraternity, but only Sulley is accepted into Roar Omega Roar, the most prestigious fraternity on campus. At the semester’s final exam, the two’s rivalry escalates into a fight between them and causes them to accidentally break Dean Abigail Hardscrabble’s cherished scream canister; Hardscrabble fails them both on the spot, citing Sulley’s laziness and Mike’s complete lack of scariness, after which Roar Omega Roar promptly expels Sulley.
Determined to prove himself, Mike enters the university’s “Scare Games,” making a bet with Hardscrabble: if he and his team win she will reinstate them all to the scare program, but if they lose Mike must leave the university. He joins a fraternity of misfits named Oozma Kappa, but they are initially denied entry to the Games for being one team member short; in addition to Mike, the fraternity’s members are the nervous Scott “Squishy” Squibbles, middle-aged president Don Carlton, polar-opposite conjoined twins Terri and Terry Perry, and shaggy Art who is all face and arms.
At first, Mike begs his roommate Randall to join Oozma Kappa, but he declines (telling Mike not to ruin things for him now that he’s in with the cool crowd), having been accepted into Roar Omega Roar after Sulley’s expulsion. Sulley decides join the Oozmas, seeing the competition as his only way back into the scare program; with no other options, Mike reluctantly agrees.
Oozma Kappa finishes last in the first challenge, but are saved from elimination when Jaws Theta Chi is disqualified for using an illegal protective gel. OK gradually improves due to Mike’s training, intricate knowledge of scaring and a motivational trip to Monsters Inc. (where Mike and Sulley start to become friends), and they advance through each subsequent challenge, reaching the final challenge against Roar Omega Roar.
In the final round, Oozma Kappa defeats Roar Omega Roar with a decisive final scare by Mike in the simulation bedroom. However, he learns that he only won because Sulley secretly rigged the machine to give Mike a maximum score.
Determined to prove that he can be a scarer, Mike breaks into the school’s door-making lab, where he enters a door to the human world. Finding himself at a summer camp in a cabin full of children who aren’t scared of him, he is forced to flee into the woods. Hardscrabble forbids anyone else from going through the door, but Sulley sneaks through to rescue Mike.
After reconciling, they try to return, but are unable to because Hardscrabble has deactivated the door while waiting for the authorities to arrive. Pursued by camp rangers, Mike realizes that the only way to escape is to generate enough scream energy to power the door from their side. Working together, Mike and Sulley terrify the camp rangers and generate an overwhelming amount of scream energy, returning to the lab seconds before the device overloads and explodes in front of a shocked Hardscrabble.
Mike and Sulley are expelled from the university, while the other members of Oozma Kappa are accepted into the scare program for the next semester, having impressed Hardscrabble with their performance in the Games. Don announces he is going to marry Squishy’s mother, Sheri.
As Mike leaves on the bus, Sulley chases him to raise his spirits. Hardscrabble appears and wishes them good luck, stating that they were the first students to ever surprise her, and she tells Mike to “keep surprising people”.
Mike and Sulley join Monsters Inc. as mailmen, and eventually work their way up to become a scare team.
In a post-credits scene, a slug-like monster (who previously appeared in a scene where, upon hearing the school bell, he attempts to go to the university at a snail’s pace) finally enters a classroom, only to find out that he missed the entire school year due to his slow speed.