Young teenagers Jake and Marco leave the mall one evening. On the way out, they meet Rachel and Cassie, who are together, and Tobias—all children from their school—and decide to walk home together. While taking a shortcut through an abandoned construction site, an alien spacecraft lands nearby. The badly injured alien pilot, an Andalite named Prince Elfangor, emerges from the ship and explains to the children that the Earth is being invaded in secret by a race of aliens called the Yeerks, a slug-like parasitic species who infest humans through their ear canals and take complete control of the human's body, turning them into what is called a Controller. The human controllers are still self-aware but the Yeerk in their head has complete control over their body and what they say. Elfangor tells them that more Andalites will not come to Earth for a year or more, and by then, Earth will already be completely taken over. To combat the Yeerks, he gives the humans morphing ability: the power to become any creature they touch by absorbing the creature's DNA. Elfangor warns them to never stay beyond two hours in a morph, or they will be trapped in that form forever. The Yeerks, led by Visser Three, arrive to kill Elfangor and eliminate all traces of him and his ship. The humans hide and watch, but are discovered and chased by the Yeerks. The group escapes shaken, but more or less unhurt.

The next morning, Tobias visits Jake and informs him that the previous night was not just a dream; he had already morphed into his pet cat. The five kids meet at Cassie's farm, where a police officer arrives and informs them that a group of teenagers were sighted setting off fireworks in the abandoned construction site the previous night. He asks if they know anything about it, and the five of them realize that the police officer is a Controller. Later that day, Jake's older brother Tom expresses a similar interest in the teenagers at the construction site and presses Jake for information. Marco realizes—much to Jake's anger—that Tom is also a Controller. Tom invites Jake and Marco to a meeting of a local community club called The Sharing, which the teens quickly determine is a front for the Yeerks to acquire new hosts. They also discover that their assistant principal Mr. Chapman is the leader of The Sharing and a human-Controller.

The next day, Jake morphs into a green anole lizard to spy on Chapman, and discovers that there is an entrance to the Yeerk Pool—a large, underground control center where the Yeerks can feed and recuperate—in their school. The teenagers, newly christened as Animorphs (from animal morphers) by Marco, head to The Gardens, a large zoo and amusement park, to acquire some new, battle-capable morphs. That evening, they decide to infiltrate the Yeerk Pool in order to rescue Tom, but find that Cassie has been kidnapped by the policeman-Controller. With no time to plan a strategy, the four remaining Animorphs head into the Yeerk Pool. They manage to rescue Cassie, but find themselves outnumbered and outgunned by Visser Three and his Yeerks. Jake, Rachel, Marco, and Cassie barely escape along with a woman who is free. During the escape, the policeman-Controller is killed. Tobias is able to escape later, but has stayed in morph too long and gets stuck in morph as a red-tailed hawk. The Animorphs fail to rescue Tom, and Jake promises to keep fighting the Yeerks until the Andalites arrive.