On a distant planet, Sonic, an anthropomorphic blue hedgehog who can run at supersonic speed, is chased by a tribe of echidnas for his power. His guardian, Longclaw the Owl, gives him a bag of rings that open portals to other planets. She uses one to send him to Earth while she stays behind to hold off the echidnas.

Ten years later, Sonic enjoys a secret life near the town of Green Hills, Montana, but longs to make friends. He idolizes the local sheriff, Tom Wachowski, calling him "Donut Lord", and his veterinarian wife, Maddie, calling her "Pretzel Lady", unaware the pair are planning to relocate to San Francisco, as Tom, bored with the lack of action in Green Hills, plans to accept a position he has just been offered with the San Francisco Police Department.

One night, Sonic becomes upset over his loneliness while playing baseball by himself and starts running at high speeds in a circle, accidentally triggering an electromagnetic pulse which causes a large-scale power outage across the Pacific Northwest instead. The United States Department of Defense reluctantly enlists the services of eccentric roboticist and scientific genius Dr. Robotnik to determine the cause. Sonic, in a state of shock, flees from his underground home, but Tom discovers Sonic in his shed and accidentally shoots him with a tranquilizer dart, causing Sonic to see the Transamerica Pyramid on Tom's shirt and accidentally drop his bag of rings through a portal to the top of the same building instead of the "mushroom planet" he was planning to travel to. Tom hesitantly agrees to help Sonic and the two flee when confronted by Robotnik, who falsely labels Tom a domestic terrorist. The two slowly bond, with Tom finding himself sympathetic to Sonic's desire for a real friend. Sonic creates a bucket list and Tom helps him complete several entries along their journey.

Having recovered one of Sonic's quills, Robotnik analyzes it and discovers it holds an almost limitless amount of electrical energy. He decides to capture Sonic and use him to power his machines. As he tracks them down, Sonic and Tom debate over Tom's plans to leave Green Hills, which Sonic disapproves of because, regardless of how much action there needs to be, he knows Tom still has to protect and serve Green Hill's citizens. Sonic and Tom manage to fight off several mechanized pursuit drones sent by Robotnik until Sonic is badly injured after the battle.

Arriving in San Francisco, Tom brings him to Maddie, who treats him at her sister Rachel's home. While Tom explains their situation to her, Sonic receives a new pair of red sneakers to replace his ruined ones from Jojo, Maddie's niece. The group soon heads to the roof of the pyramid and recovers the rings. Robotnik arrives, piloting an advanced attack hovercraft powered by the quill. Sonic taunts Robotnik by calling him "Eggman" after his egg-shaped drones. Despite Robotnik matching his speed using the quill's power, Sonic fights off Robotnik's drones and uses one of his rings to send Tom and Maddie back to Green Hills to protect them.

Robotnik pursues Sonic across the world through San Francisco, France, China, and Egypt - inadvertently completing several of Sonic's bucket list entries in the process - ultimately returning to Green Hills. Robotnik knocks Sonic unconscious, but Tom and the townsfolk intervene, and Tom says that Sonic is his friend, causing Sonic to regain his strength. Sonic then defeats Robotnik by opening a portal to send him to the mushroom planet, through the force of an electromagnetic-powered spin dash. Following the incident, Tom and Maddie decide to stay in Green Hills and let Sonic live with them. The government agrees to hide Sonic's existence by erasing all evidence of the events, including records of Robotnik's existence.

Three months later, Robotnik is still in possession of Sonic's quill and usable equipment salvaged from the remains of his hovercraft. While shaving his head, he swears to return to Earth and exact revenge against Sonic. Tails, a two-tailed fox, emerges from a ring portal on Earth to search for Sonic.

Eight months after defeating Doctor Robotnik, Sonic the Hedgehog attempts to help the public as a vigilante to little success. Tom Wachowski, Sonic's caretaker, advises Sonic to remain patient for the day his powers will be needed before he and his wife Maddie depart for her sister Rachel's wedding in Hawaii. Sonic plans to have fun while home alone but is attacked by Robotnik, who has returned with the help of Knuckles the Echidna. Knuckles desires to honor the legacy of his extinct tribe and demands the location of the legendary Master Emerald, an ancient relic that allows its possessor to bend reality to their will.

Sonic is rescued by Miles "Tails" Prower, a two-tailed fox who idolizes him and comes to warn him about Knuckles. Sonic convinces Tails to help him find the Master Emerald, while Robotnik reunites with his assistant Stone and, scheming to steal the emerald, offers to help Knuckles. Sonic and Tails follow clues on a map from Sonic's dead guardian Longclaw to Siberia, where they find a compass within an old temple. Robotnik and Knuckles track them and chase Sonic and Tails down a mountain. During an ensuing avalanche, Robotnik and Knuckles steal the compass. Tom saves Sonic and Tails by using a ring to teleport them to the wedding.

Rachel's fiancè Randall and his wedding guests reveal themselves as undercover agents of the Guardian Units of Nations (G.U.N. for short) and capture Sonic, Tails, and Tom, who are then saved by Maddie and a vengeful Rachel, the latter of whom reconciles with Randall. Robotnik and Knuckles find a large water temple containing the Master Emerald. Sonic goes to the temple and fights Knuckles while Robotnik uses the distraction to seize and fuse himself with the emerald, which explodes and sinks the temple into the water. Sonic and Knuckles escape and agree to work together as Tails rescues them in a biplane.

In Green Hills, Robotnik uses his new abilities to create a giant robot resembling himself. Sonic, Tails, and Knuckles work together to fight the robot and its accompanying drones and to reclaim the Master Emerald, but it's broken, splitting out the seven Chaos Emeralds. Tom and Maddie save Sonic, who uses the Chaos Emeralds to transform into Super Sonic. He destroys the robot before dispersing the Emeralds and reverting to normal. Knuckles fixes the Master Emerald from the remaining shards and agrees to guard it with Sonic and Tails. The three resume an idyllic life with the Wachowskis.

Stone infiltrates G.U.N. as it begins searching for Robotnik in the mech's rubble. An agent reports to G.U.N. Commander Walters that a 50-year-old file hidden in G.U.N's database containing coordinates to an off-site research facility, which houses Shadow the Hedgehog, has been uncovered.