At the top of the Empire State Building, Poseidon (Kevin McKidd) meets with ZeusSean Bean), who comments that the storm clouds have no lightning and that his master bolt has been stolen. He blames Poseidon's son for the theft. Despite Poseidon's claims of his son's innocence, Zeus gives Poseidon 14 days to return it, lest war break out. During a field trip to an exhibition of Greek and Roman art, teenager Percy Jackson (Logan Lerman), is lured away from the crowd by a Fury disguised as his substitute English teacher, who then attacks him, questioning him about the lightning bolt. The incredulous Percy, who has no knowledge of this, is rescued by his Latin teacher, Mr. Brunner (Pierce Brosnan). After dispatching the Fury, Brunner gives Percy a magical pen. On Brunner's instruction, Percy's best friend, Grover (Brandon T. Jackson), takes Percy to a training camp for demigods, Camp Half-Blood, along with Percy's mother, Sally Jackson (Catherine Keener). During their trip to the camp, Percy attempts to learn about his biological father from Sally, but they are attacked by a Minotaur. Although Percy and Grover, who is revealed to be a satyr, make it to the camp, its defenses prohibit entrance to Sally, who is captured by the Minotaur, and disappears before Percy. Percy engages the Minotaur with the magical pen, which turns into a sword named Riptide, eventually killing the creature with one of its horns.
In touring Camp Half-Blood, Percy learns that Brunner is the mythological centaur Chiron, and the camp's trainer, and that his father is the god Poseidon. He also meets Luke Castellan (Jake Abel), the son of Hermes, and Annabeth Chase (Alexandra Daddario), the demigod daughter of Athena. While at the camp, Percy learns that water has the power to heal his injuries, and allows him to manifest his magical abilities.
Hades later appears and reveals that Sally Jackson is his prisoner, and proposes she be traded for the master bolt. Chiron instructs Percy not to bargain with the demon, but to go to Olympus to convince Zeus of his innocence. Percy sneaks away from the camp to travel to the Underworld, along with Grover and Annabeth, who secure for him from Luke a portable shield, flying shoes and a map to Persephone's pearls, one of which will reveal the exit from the Underworld when retrieved.
At Aunty Em's Garden Emporium, the trio are attacked by Medusa (Uma Thurman), but manage to decapitate her, and take the pearl from her bracelet. They also take her head, which they later successfully use against a hydra that attacks them during their acquisition of another pearl from the crown of a giant statue of Athena at the Parthenon replica in Nashville, Tennessee. They acquire the third and final pearl from a roulette wheel at a hotel casino in Las Vegas, Nevada, in part with help from Poseidon, who aids them against Lotus Eaters. The map reveals an entrance to the Underworld in Hollywood, California, beneath the Hollywood Sign.
The trio enter the Underworld, where, after traveling across the River Styx, they encounter Persephone, who takes them to Hades. Percy attempts to explain to Hades that he is not the lightning thief. During an ensuing melee, Percy drops his shield, whose handle conceals the missing master bolt, which Hades takes. However, the trio manage to reacquire it before escaping the Underworld with the rescued Sally. They are transported to the top of the Empire State Building, which they learn is the location to the entrance to Olympus. They are confronted by Luke, who reveals himself to have been the real lightning thief. Expressing his desire for a new generation of rulers to take over Olympus, he explains that he had hoped that the trio would not have escaped the Underworld alive, and after stealing the bolt from Percy, the two engage in battle. After using his water powers to dispatch Luke, Percy arrives in Olympus, where he presents the retrieved bolt, and reveals the truth about Luke. Poseidon explains to Percy the reason why they could not know each other during Percy's childhood, but expresses his love for his son. Percy returns to Camp Half-Blood, where he resumes his training. Sally forces Gabe out of their apartment, and as he goes to get a beer from the fridge, opens it only to be turned to stone because Medusa's unprotected eyes are staring right back at him.
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