On the day Allfather Odin (Anthony Hopkins) is to name his sibling, Thor Odinson (Chris Hemsworth), the new ruler of Asgard, Frost Giants infiltrate the god's realm to recover the Casket of Ancient Winters, a powerful weapon taken by Odin from the Frost Giants after defeating them in a war which took place millennia ago.
Though the thieves are neutralized, Thor commands a secret journey to Jotunheim, the Frost Giants realm, to teach them a lesson. Thor is accompanied by his friends Hogun, Fandral, Volstagg, Sif, and his brother, Loki (Tom Hiddleston).
Laufey, the Giants' leader, tries reasoning with cocky Odinson to prevent a bloody fight. But the boyish-thinking god of thunder turns a deaf ear and using his magic mallet Mjolnir, causes havoc and casualties among the giants. Odin must interfere in person to halt the conflict before it gets any worse, and brings the group back to Asgard.
Furious at his father for babysitting him, Thor treats Odin as a decadent man and calls him a fool. Disappointed at his own son for his arrogance and disobedience, Odin strips Thor of his powers and removes Mjolnir from his hand. Now, as simply Odinson, he is cast down to Earth in punishment.
On the New Mexico desert, scientist Jane Foster (Natalie Portman) and her team, Dr Selvig and assistant Darcy Lewis, accidentally hit Odinson with their van while pursuing a scientific discovery. They were after a strange cosmic event, caused by Odinson falling from the heavens.
They bring Odinson to a medical facility. He heals immediately but is sedated to prevent the large man from punching doctors and male nurses. The way he speaks about Norse mythology draws Dr Selvig's attention.
Meanwhile, SHIELD learns about the location of Thor's mallet - near the area Odinson was found and builds an impromptu base around the hammer. Discovering that Foster was in that area, they confiscate her notes and laptop in search for clues.
Jane accidentally meets with Odinson again, and when the huge beach-boy learns a government agency stole her study, he infiltrates the base to recover it and get his mallet back.
Unfortunately, Odinson is unable to lift Mjolnir. He no longer is worthy of wielding it. Depressed, he offers no resistance to SHIELD agents who capture and lock him up.
Meanwhile, in Asgard, Loki finds out that he actually is a Frost Giant. Not the true son of Odin like Thor is. Odin reveals that he brought Loki to Asgard as a baby when the war with the giants ended. He was a truce, with Laufey, to prevent a new war.
Such revelation fills a tearful Loki with anger. Odin is deeply touched by his reaction and falls unconscious.
With Odin in a coma-like state (called Odinsleep) and Thor away, Loki becomes the interim ruler of Asgard.
Loki visits Odinson at his cell (SHIELD cannot detect his presence) to inform him of the recent news. But the god of mischief lies and exaggerates, telling Thor that Odin could not cope with Thor's situation and passed away. And that Frigga (Rene Russo), their mother, prohibited Thor from ever returning to Asgard. What the villain is trying to do is keep Odinson away from Asgard so he cannot take away the kingdom from Loki. Repented, Odinson accepts to stay in exile. Loki returns to Asgard.
In discontent with how Loki is ruling, and to aid their true friend even if such is considered treason, Fandral, Hogun, Volstagg and Sif sneak to Midgard (Earth) to find and rescue Odinson.
Meanwhile, Dr Selvig manages to get Odinson out of the SHIELD prison, falsely naming him as Donald Blake. Agent Coulson, SHIELD's highest ranked officer on the base, lets him take Odinson, but has his men follow them secretly.
The Warriors Three and Lady Sif arrive at the small town where Odinson is. The massive blond is thrilled to see his friends again. But such turns into ire as he learns Loki tricked him, lying about Odin's death. He must return to Asgard to set things right.
As Loki finds out about that, he sends the Destroyer to kill Odinson and his friends. Sif, Hogun, Volstagg and Fandral try stopping the indestructible metal powerhouse but are no match for it. To save his friends, Odinson confronts the Destroyer himself (without powers!) but makes a deal with Loki first: Exchanging his life to spear those of his friends. Loki accepts and the Destroyer propitiates a fatal blow. Odinson dies in the arms of Jane Foster as the Destroyer prepares to return to Asgard.
Odinson's sacrifice proved him a worthy wielder of Mjolnir. So the hammer lifts itself from the SHIELD base and flies to where Odinson's lifeless body is laying down. Dr Selvig grabs Jane in the nick of time before the mallet comes down in full force. Odinson resurrects, grabbing Mjolnir and turning into Thor - with armour and all. Jane and Dr Selvig are in awe.
Realizing Thor is there, the Destroyer turns around and prepares to fight. But the god of thunder proves to be more than a decent match and beats it.
SHIELD agent Coulson and his men arrive at the scene to meet Thor. He explains Coulson ("son of Coul") that he would be their ally in protecting their planet only if they return Jane's stolen work to her. "Borrowed", justifies Coulson.
Thor and Jane Foster kiss. Promising to return, he gets Heimdall to bring him as his Asgardian friends back to their realm, where Thor confronts Loki in front of Frigga and learns more about his stepbrother's lies. Loki and Thor begin to fight
Loki is blinded with rage, wanting to use the Bifrost to destroy Jotunheim. But Thor ruins Loki's plans by breaking a section of the Bifrost bridge, even if that meant he may never be able to see Jane Foster again.
Loki attacks Thor but falls from the bridge to the abyss. Thor jumps to grab Loki as Odin intervenes, holding Thor. The younger hero tries reasoning with Loki. But he's made up his mind, and releases Thor's hands, letting himself fall, seemingly to his death.
Odin recognizes that Thor has changed positively, becoming worthy of the throne of Asgard. But the Allfather will remain king for the time being. Thor longs to return to Earth to visit his beloved Jane Foster, but he cannot until the Bifrost is fully restored.