Pixar, who had been producing short animated films to promote their computers, was approached by Disney to produce a computer-animated feature after the success of the short Tin Toy (1988), which is told from the perspective of a toy. Lasseter, Stanton, and Pete Docter wrote early story treatments which were thrown out by Disney, who pushed for a more edgy film. After disastrous story reels, production was halted and the script was re-written, better reflecting the tone and theme Pixar desired: that "toys deeply want children to play with them, and that this desire drives their hopes, fears, and actions." The studio, then consisting of a relatively small number of employees, produced the film under minor financial constraints.
The top-grossing film on its opening weekend, Toy Story went on to earn over $361 million worldwide. Reviews were highly positive, praising both the animation's technical innovation and the screenplay's wit and sophistication, and it is now widely considered by many critics to be one of the best animated films ever made. In addition to home media releases and theatrical re-releases, Toy Story-inspired material has run the gamut from toys, video games, theme park attractions, spin-offs, merchandise, and two sequels—Toy Story 2 (1999) and Toy Story 3 (2010)—both of which received massive commercial success and critical acclaim. Toy Story was inducted into the National Film Registry as being "culturally, historically, or aesthetically significant" in 2005; its first year of eligibility.
Woody is a pull-string cowboy doll and leader of a group of toys that belong to a boy named Andy. With his family moving homes one week before his birthday, Andy is given a week early party to spend with his friends. The toys stage a reconnaissance mission to discover Andy's new presents. Andy receives a space ranger Buzz Lightyear action figure, whose impressive features see him replacing Woody as Andy's favorite toy. Woody is resentful, especially as Buzz also gets attention from the other toys. However Buzz believes himself to be a real space ranger on a mission to return to his home planet, as Woody fails to convince him he is a toy.
Andy prepares for a family outing at the space themed Pizza Planet restaurant. His mother tells him he can only bring one toy. Woody attempts to be picked instead of Buzz by trapping Buzz in a gap behind Andy's desk, but the plan goes disastrously wrong when he accidentally knocks Buzz out the window, resulting in the other toys accusing him of murdering Buzz out of jealousy. With Buzz missing, Andy takes Woody to Pizza Planet, but Buzz climbs into the car and confronts Woody when they stop at a gas station. The two fight and fall out of the car, which drives off and leaves them behind. Woody spots a truck bound for Pizza Planet and plans to rendezvous with Andy there, convincing Buzz to come with him by telling him it will take him to his home planet. Once at Pizza Planet, Buzz makes his way into a claw game machine shaped like a spaceship, thinking it to be the ship Woody promised him. Inside, he finds squeaky aliens who revere the claw arm as their master. Woody clambers into the machine after Buzz, but they are interrupted when Andy's neighbor Sid Phillips, arrives and operates the machine. Spotting a Buzz Lightyear amidst the squeaky aliens, Sid maneuvers the claw to pick up Buzz. In the ensuing struggle the aliens force Buzz and Woody towards the claw, and they are captured. Woody is horrified because of Sid's reputation for torturing and destroying toys.
At Sid's house, the two attempt to escape before Andy's moving day, encountering Sid’s nightmarish toy creations and his vicious dog, Scud. Buzz sees a commercial for Buzz Lightyear action figures and realizes that he really is a toy. Disbelieving, he attempts to prove he can fly, but instead he plummets down the stairs and loses his left arm. Buzz goes into depression as a result and is unable to cooperate with Woody. Woody waves Buzz’s arm from a window to seek help from the toys in Andy’s room, but they are horrified thinking Woody had indeed murdered Buzz when they see Buzz's disconnected arm, while Woody realizes Sid's toys are friendly when they reconnect Buzz's arm. Sid prepares to destroy Buzz by strapping him to a rocket, but is delayed that evening by a thunderstorm. Woody convinces Buzz that life is worth living because of the joy he can bring to Andy, which helps Buzz regain his spirit. Cooperating with Sid's toys, Woody rescues Buzz and scares Sid away by 'breaking a few rules' and coming to life in front of him, warning him to never harm toys again. Woody and Buzz then wave goodbye to the mutant toys and return home through a fence, but miss Andy’s car as it drives away to his new house.
Down the road, they climb onto the moving truck containing Andy’s other toys, but Scud chases them, bites down on Woody's leg and tries to pull him off. Buzz tackles the dog to save Woody. Woody attempts to rescue Buzz with Andy's RC car but the other toys, who think Woody had now got rid of RC together with Buzz, attack Woody and toss him off onto the road. After Scud is trapped in a car pile up, Woody drives RC back with Buzz alive, and the other toys, who realize their mistake, try to help them get in the truck. However they fail as RC's batteries become depleted, but Woody ignites the rocket on Buzz's back and manages to throw RC into the moving truck before they soar into the air. Buzz opens his wings to cut himself free before the rocket explodes, gliding with Woody to land safely into a box in Andy’s car. Andy looks into it and is elated to have found his two missing toys.
On Christmas Day at their new house, Buzz and Woody stage another reconnaissance mission to prepare for the new toy arrivals, one of which is a Mrs. Potato Head, much to the delight of Mr. Potato Head. As Woody jokingly asks what might be worse than Buzz, the two share a worried smile as they discover Andy's new gift is a puppy.