In the late spring of 1962, fifth-grader Scott "Scotty" Smalls moves to the San Fernando Valley, right outside of Los Angeles with his widowed mother, and recent stepfather, Bill. As school ends and summer begins, Smalls' mother encourages him to make friends, and he tries to join a group of boys who play baseball daily at the neighborhood sandlot—brothers Timmy and Tommy Timmons, Michael "Squints" Palledorous, Alan "Yeah-Yeah" McClennan, Bertram Grover Weeks, pitcher Kenny DeNunez, catcher Hamilton "Ham" Porter, and their leader and best player Benny Rodriguez. Everyone but Benny laughs at Smalls' lack of ability. When an attempt to play catch with his stepdad Bill injures Smalls and leaves him with a black eye, Benny still invites Smalls onto the team and helps him improve his skills and earn the other boys' respect.
When DeNunez taunts Ham with his trademark pitch, "The Heater", Ham hits a home run into an adjacent backyard, and the team is dismayed. However, they stop Smalls from retrieving the ball and tell him of "the Beast", a legendarily fearsome English Mastiff living behind the fence. According to Squints, in 1942, Mr. Mertle, the owner of the property, bought a young dog, and it grew increasingly big and vicious, until Squints' grandfather, who was chief of police at the time, presented Mr. Mertle with a court order to keep the Beast chained up. In the years since, many baseballs have gone over the fence, but every single one has been claimed by the Beast.
One particularly hot day, the team opts to go swimming at the neighborhood pool, in lieu of baseball. While there, Squints fakes drowning to receive mouth-to-mouth resuscitation from lifeguard Wendy Peffercorn, with whom he is infatuated; Squints kisses her, and she kicks the boys out, but as they leave Wendy waves at Squints with a warm smile. The team plays a Fourth of July night game by the light of fireworks, and Smalls observes that, to Benny, "baseball was life." They later play against a snooty rival Little League team and win. As a result, they celebrate at a fair that night, where a combination of chewing tobacco obtained by Bertram and riding the Trabant causes a huge sickly mess.