The McCallister family prepares to spend Christmas with Peter and Frank's brother Rob in Paris, gathering at Peter and Kate's home in a suburb of Chicago the night before their flight. Eight-year-old Kevin, their youngest son, finds himself the subject of ridicule from his siblings and cousins. After getting into an argument with his older brother Buzz, he is sent to the third floor bedroom of the house, where he wishes his family would disappear. During the night, a power outage resets the alarm clocks and causes the family to oversleep. In the confusion and rush to reach the airport on time, Kevin is left behind and the family does not realize it until they are already airborne. Once in Paris, his mother and father desperately try to book a flight home.
Meanwhile, Kevin wakes up to find the house empty and is overjoyed to find that his wish came true. He takes Buzz's life savings, practices shooting with Buzz's BB gun, jumps on the bed, watches a gangster film, and eats a large amount of junk food. However, he finds himself scared by the appearance of the Chicago Police Department called by his parents to check on him, his next door neighbor "Old Man" Marley, who was rumored to have murdered his family many years earlier, and the appearance of The Wet Bandits, Harry Lyme and Marv Merchants, who are breaking into other vacant houses on the block.
On Christmas Eve, Kevin overhears Harry and Marv discussing plans for breaking into his house that night. After conversing with a Santa Claus impersonator and watching a local choir perform in a church, he comes across Marley. The two of them talk, and he learns that Marley is in fact a very nice man and the rumors about him are not true. He tells Kevin he is watching the choir because his granddaughter is in it, and he never gets to see her because he and his son have not spoken in years after a big argument they had. Kevin advises him to reconcile with his son.
After leaving the church, Kevin heads home and sets up various booby traps inside the house. Harry and Marv break in. After the two spring every trap in the house, Kevin flees to the second floor of the house and dials 911. They chase him out of the house and he flees to the vacant neighboring home. The Wet Bandits catch him when he runs to the top of the stairs and hang him on a coat hook on the door. Marley has sneaked up behind them and knocks them out with a snow shovel and takes Kevin home. Shortly after, they are arrested.
Kevin wakes up the next morning and is disappointed to see that his family is still gone. He then hears Kate enter the house, calling for him. He goes downstairs and the two of them meet and reconcile. Immediately after, the rest of the McCallisters, having traveled directly from Paris to Chicago, arrive. Kevin keeps silent about his encounter with Harry and Marv, although Peter finds Harry's missing gold tooth and wonders what it is. Kevin and Buzz have a moment of reconciliation. He then goes over to the window and sees Marley greeting his son and his family. As he is hugging his granddaughter, he looks up to see Kevin. He waves at him and Kevin waves back, smiling. He watches as Marley heads inside with his family. However, Buzz interrupts him by calling out, "Kevin! What did you do to my room?" He immediately runs there and the film ends.