In Santa Cecilia, Mexico, Imelda is the wife of a musician who leaves her and their 4-year-old daughter Coco to pursue a career in music. When he never returns, Imelda banishes music from her family's life and starts a shoemaking business with her family.
Many years later, Imelda's great-great-grandson, 12-year-old Miguel, now lives with the now-elderly Coco and their family. Miguel secretly dreams of becoming a musician like Ernesto de la Cruz, a popular actor and singer of Coco's generation. One day, Miguel accidentally damages the picture frame holding a photo of Coco with her parents at the center of the family ofrenda and removes the photograph, discovering that his great-great-grandfather (whose face had been torn out) was holding Ernesto's famous guitar.
Concluding that Ernesto is his great-great-grandfather, Miguel leaves to enter a talent show for the Day of the Dead despite his family's objections. He breaks into Ernesto's mausoleum and takes his guitar to use in the show, but once he strums it, he becomes invisible to everyone in the village plaza. However, he can interact with his skeletal dead relatives who are visiting from the Land of the Dead for the holiday. Taking him there, they learn that Imelda cannot visit, as Miguel removed her photo from the ofrenda. Miguel discovers that he is cursed for stealing from the dead, and must return to the Land of the Living before sunrise or he will become one of the dead; to do so, he must receive a blessing from a member of his family. Imelda offers Miguel a blessing, but on the condition that he abandon his musical pursuits. Miguel refuses and attempts to seek Ernesto's blessing.
Miguel encounters Héctor, a down-on-his-luck skeleton who once played music with Ernesto. Héctor offers to help Miguel reach Ernesto; in return, he asks Miguel to take his photo back to the Land of the Living, so that he might visit his daughter before she forgets him and he disappears completely. Upon learning he has other relatives, however, Héctor attempts to return Miguel to them. Miguel escapes and infiltrates Ernesto's mansion, learning along the way that an old friendship between the two deteriorated before Héctor's death. Ernesto welcomes Miguel as his descendant, but Héctor confronts them, again imploring Miguel to take his photo to the Land of the Living. An argument between Ernesto and Héctor, stemming from Héctor's decision to leave the duo and return to his family, causes Miguel to realize that Ernesto murdered Héctor by poisoning him and stole his songs, passing them off as his own to become famous.
To maintain his legacy, Ernesto steals the photo and has Miguel and Héctor thrown into a cenote pit, where Miguel realizes that Héctor is his real great-great-grandfather and that Coco is Héctor's daughter. The dead find and rescue the duo. Miguel reveals that Héctor's decision to return home to Imelda and Coco resulted in his death, and Imelda and Héctor gradually reconcile. They infiltrate Ernesto's sunrise concert to retrieve Héctor's photo from Ernesto, who attempts to kill Miguel to prevent him from returning with the photo. However, they secretly record Ernesto's admission to his misdeeds live to the concertgoers, who jeer Ernesto as he is propelled by the family alebrije, Pepita, into a bell tower, where he is crushed.
As the sun rises, Héctor is in danger of being forgotten by Coco and disappearing. Imelda and Héctor bless Miguel unconditionally so he can return to the Land of the Living. Miguel plays "Remember Me," a song Héctor used to sing for Coco, revitalizing her memory of Héctor. She gives Miguel the torn-out piece of the photo from the ofrenda, which shows Héctor's face, and tells her family stories about her father, thus keeping his memory alive. Miguel's family reconciles with him and accepts music again.
One year later, Miguel proudly presents the family ofrenda – including the restored photo of Héctor and Imelda, and a photo of the now-deceased Coco – to his new baby sister. Letters from Héctor saved by Coco contain evidence of Ernesto's crimes; thus, Ernesto's legacy is destroyed and Héctor is honored in his place. In the Land of the Dead, Héctor and Imelda join Coco for a visit to the living as Miguel sings and plays for his relatives, both living and dead.
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