Soren (Jim Sturgess), a fledgling barn owl, lives peacefully in the forest of Tyto with his family; his father, Noctus (Hugo Weaving); his mother, Marella (Essie Davis); his older brother, Kludd (Ryan Kwanten), his younger sister, Eglantine (Adrienne DeFaria) and Ms. P the family's nest maid. Noctus enjoys telling Soren and Eglantine stories of the Guardians of Ga'Hoole, a mythical group of warrior owls, who once saved all owlkind from the evil "Pure Ones" in a great battle in which the Guardians' leader, Lyze of Kiel, defeated the Pure Ones' leader Metal Beak. Kludd, however, thinks Soren soft-headed for believing in such stories. One night, while branching, a jealous Kludd pushes Soren and loses his balance in the process, and they both fall to the ground below. They are attacked by a Tasmanian devil but are saved and also kidnapped by a pair of Long-Eared Owls named Jatt (Leigh Whannell) and Jutt (Angus Sampson).
They are taken to St. Aegolious, home to the Pure Ones, where Soren meets an (elf owl) named Gylfie (Emily Barclay) and her captor, a (boreal owl) named Grimble (Hugo Weaving). The two are roughly thrown into a crowd of other kidnapped owlets. Nyra (Helen Mirren), second-in-command of the Pure Ones and the mate of Metal Beak, claims that the owlets now work for the Pure Ones as slaves. Soren and Gylfie protest, and are sent to be pickers, along with most of the captive owls. Kludd denies his brother, and goes away to be a soldier with other selected owls. They are tutored by Nyra in the ways of the Pure Ones, who believe that Tyto owls (barn owls and their relatives) are the strongest owls and that, because of this, they have the right to rule the owl kingdoms.
The other captured owls are forced to sleep under the full moon. Gylfie informs Soren that this will cause "moon-blinking", a trancelike state in which owls lose all sense of will and individuality. Soren and Gylfie stay awake, which means that they are not moon-blinked. They are brought to a large cavern to pick through owl pellets for small metal flecks. Soren discovers that the flecks en masse cause weakening pain in owls, when he is ordered to deliver a fleck to the bag they are kept in. The full bag is then carried away by a large bat to a gigantic metal container. Metal Beak (Joel Edgerton) and an unknown owl watch from above, making a bargain in which the unknown owl will receive a portion of the owl kingdoms and the Tree in return for laying a trap for the Pure Ones' enemies, the Guardians of Ga'Hoole.
Grimble secretly takes Soren and Gylfie to his library, where he reveals that he is not truly a Pure One. He also tells the two owlets that his family was captured by the Pure Ones and forced into their service. He teaches Soren and Gylfie to fly, so they can warn the Guardians of the Pure Ones' plans.
Kludd has become a strong soldier, and his promise prompts Nyra to ask him about Soren's similar potential. Hoping to recruit him, the Pure Ones interrupt Grimble's flying lessons. Nyra attacks Grimble, Soren and Gylfie. Kludd joins the fray on Nyra's side, ignoring Soren's pleas. Grimble sacrifices himself to hold them back, and Soren and Gylfie just barely escape to begin their quest.
On their journeys, they meet a (burrowing owl) named Digger (David Wenham); a (great gray owl) named Twilight (Anthony LaPaglia); and Soren's old nestmaid, a (snake) named Mrs. P (Miriam Margolyes). They join Soren with the promise of leading him to the Sea of Hoolemere, the location of the Great Tree and the home of the Guardians.
Soren and his allies are mobbed by (crows) on the way to the Sea and they nearly loss Twilight's lute, in which Mrs. P is riding. The battle brings them to the shore of the Sea of Hoolemere and the home of an (echidna) mystic (Barry Otto). The crows deliberately led them to the meeting so that the Echidna could give them their bearings to the Great Tree. Far out over the ocean the group encounters a fierce hurricane, and Digger falls towards the sea. Soren dives to save him, only to find Digger being rescued by an enormous (snowy owl) with an armored mask - a Guardian of Ga'hoole. The Guardian leads Soren and his friends through the storm to the Great Tree.
Digger's saviors are Boron and Barran, the king and the queen of the Tree. The king and queen, as well as the ranking officers of Ga'hoole, hear Soren's tale. The search-and-rescue squadron leader, a (great gray owl) named Allomere (Sam Neill), expresses doubts about Soren's story. But battle-scarred (whiskered screech owl) Ezylryb (Geoffrey Rush) defends Soren. Boron decides to send a scouting party, led by Allomere, to St. Aegolious.
Soren, Gylfie, Twilight, and Digger begin their training in the different trades of the Tree. During one lesson, Ezylryb takes them out to learn how to "really fly," using a powerful storm to teach the young owls how to use the wind currents instead of fighting them. Soren briefly masters the technique of flying by instinct, only to lose control and to be saved by Ezylryb.
After the lesson, Soren converses with Ezylryb in his hollow tree and learns that Ezylryb is, in fact, Lyze of Kiel. Soren is disillusioned with the seemingly heroic stories when he sees his hero's disfigurements and hears that the battle in the stories wasn't as heroic as he thought.
Allomere returns without his scouts. He tells King Boron that they were ambushed; that the scouts were killed; and that he barely managed to return with two moon-blinked owlets. One of the moon-blinked owlets is Eglantine, who was kidnapped by Kludd.
Outraged, the Guardians go to war. At the urging of Ezlyryb, Soren reluctantly stays to tend to Eglantine. She soon awakes, but with shocking news: she wasn't rescued, but given to Allomere by Kludd. Allomere is revealed to be a traitor, and Soren and his friends rush to the Guardians' aid.
When the Guardians arrive at St. Aegolious, they are drawn into a trap. Allomere peels off at the last moment and the Pure Ones unleash the power of the flecks against the Guardians, leaving the owls helpless on the ground. Soren and his friends arrive minutes too late, just as Metal Beak and Nyra send the bats to finish off the defenseless Guardians. Soren sends Twilight, Digger and Gylfie to hold back the bats. He plunges into the burning forest fire, carrying an oil lamp that becomes engulfed in flames after flying through the fire. The band's unprecedented arrival causes Metal Beak to distrust Allomere. Believing that he has been betrayed, Metal Beak orders a group of bats to viciously kill Allomere.
Soren plunges into the flecks' magnetic field to drop the flaming oil lamp on the mechanism which holds open the lids over the flecks. The fire spreads across the machine and burns through the ropes. The lids slam down, freeing the Guardians.
With his plan disrupted, Metal Beak orders the Pure Ones to fight the Guardians. Ezylryb and Metal Beak square off, as do Soren and Kludd. Their fight leads to them ending up in the burning forest. Soren tries to talk some sense into Kludd, who tells his younger brother that the Pure Ones believed in him when no one else did. He attacks Soren with renewed vigor, sending them both tumbling over a fallen tree and causing Kludd to break a wing. He convinces Soren to save him, only to attempt to pull his younger brother into the flames. Soren dodges the attack, and Kludd falls into the flames instead.
Soren sees that Ezylryb, Metal Beak, and Nyra are engaged in fierce combat. Filled with rage, he snaps off a burning branch and flies off to help Ezylryb. He takes Metal Beak by surprise, arriving in time to save Ezylryb. Metal Beak easily overpowers Soren and throws his branch away. Soren regains his weapon, just as Metal Beak moves in for the kill. Metal Beak impales himself on the branch, and Nyra retreats with the remaining Pure Ones.
Soren and his friends return to the Great Tree with the owlets, and Soren is greeted by Eglantine and his parents. Soren, Gylfie, Twilight, and Digger are made Guardians of Ga'Hoole.
In the epilogue, Soren reveals that Kludd's body was never found and Nyra is still out there with a contingent of Pure Ones. Kludd is then shown to be alive, now with the glowing red eyes of the other Pure Ones. He walks around and stares down at Metal Beak's body and mask, hinting at a sequel with Kludd as the new Metal Beak.