Dory, as a child, gets separated from her parents. As she grows up, Dory attempts to search for them, gradually forgetting them due to her short-term memory loss. After accidentally running in with Marlin, a clownfish, looking for his son Nemo, the events of Finding Nemo take place.
One year after reuniting Nemo with Marlin, Dory has become a helping hand in raising Nemo. One day during a lesson with Nemo’s class, Dory recalls through a childhood flashback that she has a family. She decides to look for them but finds her short-term memory loss to be an obstacle. The only thing she remembers is that they lived at the Jewel of Morro Bay.
Marlin and Nemo accompany Dory in her quest. With the help of Crush, they ride a water current to California. Upon arrival, Dory accidentally awakens a predatory squid, who immediately pursues them, almost devouring Nemo during the chase. Marlin tends to his son afterwards and yells at Dory for almost getting him killed. Feeling hurt, Dory travels to the surface to seek help and is captured by staff members from the nearby Marine Life Institute after being caught in six pack rings.
Dory is sent to the quarantine section and tagged. There she meets a grouchy but well-meaning, seven-legged octopus named Hank. Dory’s tag shows that she will be sent to an aquarium in Cleveland. Due to a traumatic ocean life, Hank wants to live in the aquarium instead of being released back into the ocean, so he 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 believes he has lost his ability to echolocate. Dory subsequently has flashbacks of life with her parents and struggles to recall details, but finally remembers how she became separated from her parents: she overheard her mother crying one night, left home to retrieve a shell in hopes of cheering her up, and was pulled away by an undertow current. Subsequently, she learns that the rest of her regal blue tangs species are being moved to Cleveland.
Marlin and Nemo attempt to rescue Dory. With the help of two sea lions named Fluke and Rudder and a disfigured common loon named Becky, they manage to get into the institute, and reunite with her in the pipe system. Back in Quarantine, they locate the tank of blue tangs who tell them that Dory’s parents escaped the Institute a long time ago to search for Dory but never came back. This leaves Dory under the impression that they died. Hank retrieves Dory from the tank, accidentally leaving Marlin and Nemo behind. He is then apprehended by one of the employees and unintentionally drops Dory into the drain flushing her to the ocean. Whilst wandering aimlessly, she comes across a trail of shells; remembering that when she was young, her parents had set out a similar trail to teach her how to find her way back home, she follows it. At the end of the trail, Dory finds an empty home with multiple shell trails leading away from it. As she turns to leave, she sees her parents Jenny and Charlie in the distance and joyfully reunites with them. They tell her they have spent years forming trails for her to follow in the hopes that she would eventually find them.
Marlin, Nemo, and Hank end up in the truck taking various aquatic life to Cleveland. Destiny and Bailey escape from their exhibit to help Dory rescue them. Once on board the truck, Dory persuades Hank to return to the sea with her, and together, they hijack the truck and drive it down a busy road before crashing it into the water, freeing all the fish. Dory, along with her parents and new friends, return to the reef with Marlin and Nemo.
In the post-credits scene, the Tank Gang from the first film, still trapped inside their (now algae-covered) plastic bags, reach California one year after floating across the Pacific Ocean. They are promptly rescued by the staff members from before, with Bloat asking for the second time, “Now what?”