The film begins with Sho (David Henrie) arriving at his mother's childhood house. He is there to live with his great Aunt Sadako (Grace Poletti) and the house's caretaker, Haru (Carol Burnett). Upon exiting the car, Sho notices a cat, Niya, trying to attack something in the bushes in front of the house. A crow flies overhead and starts attacking Niya which forces Niya to leave. Sho approaches the bush and sees a Borrower named Arrietty (Bridgit Mendler), the heroine of the story. Arrietty escapes through an air vent back to her home, which is located underneath the floorboards of Sho's house.
Arrietty returns home and talks with her mother, Homily (Amy Poehler), about the new boy moving in to the house. During the conversation, the audience learns about Borrowers, "tiny" people who "borrow" items from regular size human beings to survive. Borrowers only borrow items that the human beings will not miss including sugar, gas, electricity, cookies, and tissue. As it turns out, that night is the first night that Arrietty will go on her first "borrowing" mission.
Arrietty's father, Pod (Will Arnett) returns home and Homily tries to discourage Arrietty from going on her first borrowing mission by persuading Pod to take Arrietty at a future date. However, Pod decides to take Arrietty because he believes Arrietty needs to learn her independence now since she will have to survive on her own eventually.
Later in the evening, Pod takes Arrietty above the floorboards to obtain sugar and tissue for the family. Their first stop is the kitchen, where Pod demonstrates his expertise in borrowing. He uses double sided tape on his soles and mittens to scale walls and kitchen items including a blender to obtain the sugar. After retrieving the sugar, Arrietty and Pod proceed onto Sho's room to get tissue. Along the way, Arrietty gets her first "borrow" when she finds a needle pin. They arrive in Sho's bed room and are in the process of removing tissue. Before their mission is complete, Arrietty notices Sho is awake and drops the sugar cube they had just obtained moments before. Sho tells them not to be afraid of him but Arrietty and Pod immediately leave and return home.
Although Homily is disappointed that they returned empty handed, she is relieved that the two are safe. The next day, Sho leaves the dropped sugar cube and a note for Arrietty at the vent where he first saw her. The note indicates he wants to meet her, but Homily warns her not to because their existence must be kept a secret from the humans. Arrietty decides to go against her mother's wishes and sneaks out to visit Sho in his bedroom. She talks to him outside his bedroom and they become friends. However, she refuses to let him see her and stays behind a plant leaf. She proceeds home where she runs into her father.
Pod and Homily realizes that Arrietty has revealed herself to Sho and that their family has been discovered. As a result, they decide that the family must move out immediately to survive. When pressed by Arrietty as to the reasoning behind their decision, Pod reveals that two other families used to live in the house. The first family disappeared without a trace upon being discovered and the second family moved away.
Sho is visited by his grand Aunt Sadako, who reveals that their ancestors had seen Borrowers in the house. As a result, her father had a dollhouse made especially for the Borrowers with intricate details involved including working lights and kitchens. However, the Borrowers have not been seen since the house was built. Sadako indicates that the house will belong to Sho one day as it had belonged to his mother.
Pod returns home after being injured on a borrowing mission in the wild. He is assisted back home by a fellow Borrower, Spiller (Moises Arias). Spiller is about Arrietty's age and attempts to show off his hunting abilities to Arrietty, who he has a crush on and informs her family of places that they can move to. As Pod recovers from his injury, the decision is made for the family to move away as soon as possible. This is expedited when Sho removes Arrietty's family's existing kitchen and replaces it with the dollhouse kitchen. Although Sho meant it as an act of kindness, Arrietty's family feels even more threatened.
Arrietty goes out to say goodbye to Sho, and Sho is allowed to see her for the first time. He is taken aback by her beauty and tells her so. During their conversation, it is revealed that Sho has a heart condition from birth that will require surgery to fix. He also reveals that his mother is always busy with work and his father has moved away. Sho also theorizes that the Borrowers are becoming extinct, which hurts Arrietty. Sho feels bad about their conversation and confesses to her that he has wanted to protect her from the moment he saw her to make his life meaningful.
As Sho is talking with Arrietty, Haru notices that he is talking to something in the bushes. The next morning, she wanders around the house and notices that the floorboards in the entranceway closet has been disturbed. She opens up the floorboards and unearths Arrietty's home. She removes the roof and picks Homily up and puts her in a jar for safekeeping. She than proceeds to call the exterminators to trap the other Borrowers in the house.
Arrietty returns to her house to find her mother missing. Haru locks Sho in his room without him knowing to prevent him from stopping the exterminators. Arrietty makes her way to Sho's window and tells him that her mother is missing. Sho vows to help her find her mom. He notices that he is locked in and climbs out the window. He proceeds onto the room next door by climbing along the roof to the other bedroom's window. However, the other bedroom's window is locked. With the help of Arrietty, he is able to unlock the window and climb into the bedroom.
Sho finds Haru who is surprised to see him and gives a worried glance over at the pantry. Sho deduces Homily is locked up in the pantry and distracts Haru while Arrietty rescues Homily. Sadako arrives and Haru attempts to convince her that Borrowers exist and she has not been crazy all these years when things have gone missing in the house. However, Sho is one step ahead of her and moves Arrietty's house to a new location and replaces the doll house kitchen back in the doll house.
Arrietty and her family set off on their move during this time and eventually stop for dinner after traveling a considerable distance for them but short distance for regular humans. Niya notices Arrietty and has come to grow fond of her. Niya leads Sho to Arrietty just as she is about to leave with her family in a tea pot steered by Spiller.
Arrietty says goodbye to Niya and is able to touch the cat for the first time. She thanks him for brining Sho to her. During their goodbyes, Sho gives Arrietty a sugar cube as a parting gift while she gives him her hair clip to remember her by. Sho tells her that Arrietty and her family's fight for survival has given him inspiration and hope to fight and make it through his operation two days. Arrietty leaves after a tearful goodbye and thanks him for everything. Sho says as she goes away that she will always be a part of him.
As the credits roll, Arrietty is shown with her family traveling down a river in a tea pot steered by Spiller. He gives her a red berry which she accepts causing him to be extremely happy. They continue traveling down the river smiling.
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