Dom Cobb and his partner, Arthur, perform illegal corporate espionage by entering the subconscious minds of their targets, using two-level "dream within a dream" strategies to extract valuable information. Each of the extractors carries a totem, a personalized small object whose behavior is unpredictable to anyone except to the totem's owner, to determine if they are within another person's dream. Cobb's totem is a spinning top, which spins perpetually in the dream state. Cobb struggles with memories of his dead wife Mal, that manifest within the dream and try to sabotage his efforts.
Cobb is approached by the wealthy Mr. Saito asking them to perform the act of inception, planting an idea within the person's subconscious mind. Saito wishes to break up the vast energy empire of his competitor, the ailing Maurice Fischer, by suggesting this idea to his son Robert Fischer who will inherit the empire when his father dies. Should Cobb succeed, Saito promises to use his influence to clear Cobb of the murder charges for his wife's death, allowing Cobb to re-enter the United States and reunite with his children.
Cobb assembles his team: Eames, an identity forger, Yusuf a chemist who concocts the powerful sedative needed to stabilize the layers of the shared dream and Ariadne a young student architect tasked with designing the labyrinth of the dream landscapes.
While planning the inception, Ariadne learns of the guilt Cobb struggles with from Mal's suicide and his separation from his children when he fled the country as a fugitive.
The job is set into motion when Maurice Fischer dies and his son accompanies his father's body from Sydney to Los Angeles. During the flight, Cobb sedates Fischer, and the team bring him into a three-level shared dream. At each dream level, the person generating the dream stays behind to set up a "kick" to awaken the other team members from the deeper dream, coordinated by "Non, je ne regrette rien" as an auditory cue; these kicks must occur simultaneously, despite time flowing faster in each successive level.
The first level is Yusuf's dream of a rainy Los Angeles. The team abducts Robert, but are attacked by projections from his subconscious.
Saito is wounded, and Cobb reveals that while dying in the dream would normally waken dreamers, the sedatives stabilizing the multi-level dream will instead send them into "limbo": a world of infinite subconscious in which dreamers risk forgetting they are in a dream.
Eames impersonates Robert's godfather, Peter Browning, to suggest that Robert reconsider his father's will.
Cobb tells Ariadne that he and Mal entered limbo while experimenting with the dream-sharing technology. Sedated for five hours of real time, they spent fifty years in a dream world. When Mal refused to return to reality, Cobb used a rudimentary form of inception by reactivating her totem, an object dreamers use to distinguish dreams from reality. After waking up, Mal still believed she was dreaming. Attempting to "wake up" for real, she committed suicide and framed Cobb for her death to force him to do the same. Cobb fled the U.S., leaving his children in Miles' care.
Yusuf drives the team in a van as they are sedated into the second level, a hotel dreamed by Arthur.