Mary Beth, a museum tour guide, takes a group of school detention students on a secret museum tour, telling them the story of a Mexican town called San Angel from The Book of Life, which holds every story in the world. On the Day of the Dead, La Muerte, ruler of the Land of the Remembered, and Xibalba, ruler of the Land of the Forgotten, see young boys Manolo Sánchez and Joaquín Mondragon competing for the love of their mutual crush María Posada. The gods strike a wager: if María ends up marrying Manolo, Xibalba will no longer interfere in mortal affairs, but if she marries Joaquín, La Muerte and Xibalba will swap realms. However, Xibalba cheats by giving Joaquín his Medal of Everlasting Life, which grants the wearer invincibility and “immeasurable courage”.
María is sent to Spain to become a “lady” after freeing pigs destined for slaughter. Years later, when María returns to San Angel, Joaquín has become a military hero with the Medal’s aid, and Manolo’s father Carlos has trained him to be a bullfighter in their family tradition, though his real dream is to be a musician. At Manolo’s first bullfight, he defeats the bull but refuses to kill it, angering Carlos and the crowd but impressing María. That night, María is pressured by her father and San Angel’s mayor, General Ramiro Posada, to marry Joaquín so he stays in San Angel and therefore protects the town from the Bandit King Chakal——but María is reluctant. She instead professes her mutual love for Manolo before dawn, but they are interrupted when Xibalba sends his dual-headed snake staff, which bites her and sends her into a coma. Devastated by María’s apparent death, Manolo allows Xibalba to kill him, believing he will be reunited with María in death.
In the Land of the Remembered, Manolo reunites with his mother and his ancestral family. They travel to La Muerte’s castle, discovering Xibalba, now the ruler of the realm, who explains the bet and smugly reveals that María did not die because she was only bitten once and therefore survived. However, Manolo was bitten twice and died. Furious but determined to return to María, Manolo travels to the Cave of Souls to reach La Muerte. Inside, he meets the Candle Maker, the overseer of mortal lives and the Book of Life’s keeper. The Candle Maker sees that Manolo’s story in the Book of Life is blank and can be rewritten by himself, so he takes them to the Land of the Forgotten. They find La Muerte at Xibalba’s castle and expose his cheating. Furious, La Muerte lectures Xibalba before offering a new wager at Manolo’s request: Manolo’s life will be returned if he completes a challenge of Xibalba’s choosing, but if he fails, he will be forgotten and Xibalba will keep both realms. Xibalba sets Manolo against a giant bull skeleton made from the skeletons of every bull slain by the Sanchez family, believing that to be his greatest fear.
Meanwhile, María awakens from her coma and is heartbroken after learning of Manolo’s death. She reluctantly accepts Joaquín’s proposal, but he begins to reconsider after seeing her despair. Their wedding is interrupted by Chakal, who leads his army to San Angel to find the Medal, which was previously his. Carlos sacrifices himself in a fight against Chakal to buy time for San Angel, and he arrives in the Land of the Remembered in time to see Manolo’s fight. Manolo, realizing his fear is actually of being himself, refuses to fight and instead sings an apology to the bull, appeasing it and touching the hearts of everyone present (including Xibalba and Carlos). Impressed, the deities resurrect Manolo and send him and his family to San Angel to protect the town. Manolo is knocked unconscious when Chakal destructs himself, but he is protected by the Medal, which Joaquín had slipped him earlier. Joaquín returns it to Xibalba and resolves to be a true hero, while Manolo and María are happily married as Xibalba and La Muerte reconcile.
In the present, Mary Beth finishes the story, and the amazed children leave the museum. Mary Beth and a security guard reveal themselves to be La Muerte and Xibalba in disguise. The Candle Maker appears and encourages the audience to write their own story.
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