On the day all-father Odin (Anthony Hopkins) is to name his son Thor (Chris Hemsworth) the new ruler of Asgard, Frost Giants infiltrate the gods realm to restore a power item of them, stole by Odin after their last war. Although the thieves are neutralized, Thor commands a secret journey to the Frost Giants realm with friends Hogun, Fandral, Volstagg, Sif, and his step brother Loki (Tom Hiddleston), to teach the intruders a lesson. Using his magic mallet Mjolnir, Thor causes casualties among the giants until Odin stops the fight before it ignites a new war. Disappointed at his son, Odin punishes Thor for his arrogance and stupidity by removing his powers and casting him down to Earth.
Scientist Jane Foster (Natalie Portman) and her team find Thor after dropping down from the heavens on a New Mexico desert. Mjolnir lands nearby. The mallet gets S.H.IE.L.D.'s attention and the secret agency confiscates all of Foster's work. Thor tries to retrieve his hammer but is unable to lift it since he no longer is worthy of wielding it.
Meanwhile, Loki learns that he is a Frost Giant who was brought as a baby to Asgard by Odin as a truce to prevent a new war. Loki's sorrow shocks Odin, falling in a state of unconsciousness. Loki becomes the ruler of Asgard and visits Thor on Earth to lie that Odin has died because of Thor's imprudence and Frigga (Rene Russo), her mother, has prohibited Thor from returning to Asgard.
Fandral, Sif, Hogun and Volstagg escape Asgard to save Thor, who learns of Loki lies. Thus the god of mischief sends the Destroyer to kill them all. Thor, even a mortal without his powers, confronts the Destroyer to save his friends and humanity. The Destroyer easily kills Thor.
Having proved a hero and a worthy wielder of Mjolnir, the hammer finds Thor, reviving him as the immortal God of Thunder. Thor defeats the Destroyer and aided by Heimdall, the gate keeper, returns to Asgard with his friends. Thor and Loki battle and after partially defeating his step-brother, Thor breaks the Bifrost bridge to prevent the Frost Giant's destruction, orchestrated by Loki. The two god brothers resume their fight and Odin appears to save them from falling into the void. But Loki purposely lets himself fall.
The whole experience has made Thor more mature and wiser, which is sensed by his now proud father Odin. Although heir to the throne of Asgard, Thor longs to return to Earth to his beloved Jane Foster, who is waiting for him on Midgard. But Thor cannot go until Bifrost is restored.