As a young boy, Carl idolized explorer Charles F. Muntz. Muntz has been accused of fabricating the skeleton of a giant bird he says that he discovered in Paradise Falls, and vows to return there to capture one alive. One day, Carl befriends Ellie, who is also a Muntz fan. She confides to Carl her desire to move her "clubhouse" — an abandoned house in the neighborhood — to a cliff overlooking Paradise Falls. Carl and Ellie eventually get married and grow old together in the restored house. Though they planned to have children together, Ellie is diagnosed as infertile. Carl therefore wants to fulfill their promise of travel to South America, repeatedly pooling their savings for a trip to Paradise Falls. An elderly Carl finally arranges for the trip, but Ellie suddenly becomes ill and dies.
Some time later, Carl still lives in the house when he accidentally injures a construction worker over damage to his mailbox, and a court orders him to move to a retirement home. However, Carl comes up with a scheme to keep his promise to Ellie: he turns his house into a makeshift airship, using thousands of helium balloons. Russell, a young Wilderness Explorer becomes an accidental passenger in his effort to earn his final merit badge for assisting the elderly.
After surviving a thunderstorm, the house lands near a ravine facing Paradise Falls. Carl and Russell harness themselves to the still-buoyant house and begin to walk it around the ravine, hoping to reach the falls before the balloons deflate. They later befriend a tall, colorful flightless bird (whom Russell names "Kevin") trying to reach her chicks, and a dog named Dug, who wears a special collar that allows him to speak.
Carl and Russell encounter a pack of dogs led by Alpha, and are taken to Dug's master, who turns out to be an elderly Charles Muntz. Muntz invites Carl and Russell aboard his dirigible, the "Spirit of Adventure" where he explains that he has spent the years since his disgrace searching Paradise Falls for the giant bird. When Russell notes the bird's similarity to Kevin, Muntz then becomes hostile, prompting the pair to flee with Kevin and Dug. Muntz catches up with them and starts a fire beneath Carl's house, forcing Carl to choose between saving it or Kevin. Carl rushes to put out the fire, allowing Muntz to take the bird. Carl and Russell eventually reach the falls, though Russell is disappointed in Carl over his decision to abandon Kevin.
Settling into his home, Carl looks through Ellie's childhood scrapbook; finding photos of their happy marriage added into it, along with a note from Ellie thanking him for the "adventure" and encouraging him to go have a new one. Reinvigorated, he goes to find Russell, only to see him sailing off on some balloons to save Kevin. Carl empties the house of furniture and possessions, lightening it, and pursues him.
Russell is captured by Muntz, but Carl manages to board the dirigible in flight and free both Russell and Kevin. Dug defeats Alpha and become the dogs' new leader. Muntz pursues them around the airship, finally cornering Dug, Kevin, and Russell inside Carl's tethered house. Carl lures Kevin out through a window and back onto the airship with Dug and Russell clinging to her back, just as Muntz is about to close in; Muntz leaps after them, only to snag his foot on some balloon lines and fall to his death. The house then descends out of sight through the clouds.
Carl and Russell reunite Kevin with her chicks, then fly the dirigible back to the city. Carl presents Russell with his final badge: a grape soda cap that Ellie gave to Carl when they first met and made their promise. The two then enjoy some ice cream together. Meanwhile, Carl's house is shown to have landed on the cliff beside Paradise Falls, as promised to Ellie.