| According to legend, humans were fascinated with the sky; therefore they created increasingly sophisticated ways of lifting aircraft from the ground. This eventually led to flying cities and fortresses. Over time, the cities came crashing back to the ground, forcing the survivors to live on the ground as before. One city, Laputa, is said to remain in the sky, concealed within the swirling clouds of a violent thunderstorm. While most people consider it to be fictional, some believe the legend is true and have sought to find the ancient city. Airships still remain in common use.
Aboard an airship, a young girl, Sheeta, is escorted to an unknown destination by sinister-looking agents under Colonel Muska. The ship is attacked by a group of sky pirates; in the resulting disorder, Sheeta takes a small pendant from Muska and escapes. The sky pirates, led by an old but vivacious woman Dola, attempt to seize her and the pendant, but Sheeta accidentally falls from the ship. As she falls, the pendant radiates a blue light and she gently floats to the ground. A young boy miner, Pazu, witnesses this in amazement and catches Sheeta. He takes her back to his home, where she finds a photograph of Laputa. Pazu explains that his deceased father, an aerial pilot and adventurer, took the photo, but was disbelieved by his contemporaries. Pazu believes the city exists, however, and wants to find it someday himself.
Dola’s band of sky pirates (mainly built up of her sons) arrive at Pazu's house, forcing the children to escape on a railway. Their path is eventually blocked by an armored train; the government agents inside attempt to capture Sheeta. With both pursuing parties fighting each other over the girl, the children fall from a collapsing rail trestle, but are saved when Sheeta's pendant activates once again, allowing them to float safely into an abandoned mine shaft.
Sheeta and Pazu
There they meet an old miner, Uncle Pom, who tells them of "volucite" ("aetherium" in Disney's English language dub), the crystal that provided Laputa with its power. He reveals that Sheeta’s pendant is one of the largest and purest of such crystals in existence, and counsels Sheeta to remember that the crystal's power rightly belongs to the earth, and that she should never use it to commit acts of violence.
Upon returning to the surface of the land, Sheeta tells Pazu that she has inherited an ancient "secret name": Lusheeta Toel Ul Laputa (Laputian for "Sheeta, True Ruler of Laputa"). Government agents suddenly appear and take them both into custody. They are taken to a fortress and separated.
The general in command of the fortress discusses with Muska the government-sponsored search for Laputa, and agree that Sheeta and her crystal are the keys to its discovery. Muska reveals to Sheeta his knowledge of her true name, shows her a huge android robot believed to have been created in Laputa, and intimates that unless she co-operates with him in unlocking the crystal's secrets, which he believes can be used to physically locate Laputa, Pazu is likely to come to harm. Seeking to protect her friend, Sheeta tells Pazu that she has agreed to co-operate with Muska and asks him to forget her and Laputa. Stung by this apparent rejection, Pazu returns to his village, only to find Dola's pirate family occupying his home. Pazu tells Dola of his experiences; when the pirates learn that Sheeta, Muska, and the general will depart the fortress in search of Laputa aboard the gigantic military airship Goliath, Pazu begs Dola to take him with her.
In the fortress tower, Sheeta absent-mindedly recites a spell given by her grandmother, causing the crystal to illuminate a strange blue light that points to Laputa. The spell also re-animates the robot, which wreaks havoc all over the fortress, causing it to catch on fire. The robot rescues Sheeta, demonstrating its loyalty, before it is destroyed by the Goliath airship. In the meantime, Dola and Pazu show up and rescue Sheeta from the burning tower.
The children and Dola's pirates pursue the Goliath aboard the pirate ship Tiger Moth, intent on finding Laputa before the Goliath does. That night, as Sheeta and Pazu stand watch on the crows nest, they talk at length about their respective lives, touching upon Sheeta's study of magic words and mentioning one such spell, the Spell of Destruction, a power Sheeta has never used. Dola, who is awake in bed, overhears their discussions through the intercom.
Amid their conversation, Pazu sees the Goliath rise from the clouds. The airship attacks, but the Tiger Moth escapes unharmed. The Tiger Moth enters a storm, and Dola tells the children to keep watch above the clouds by turning the crows nest into a glider. Soon a massive cloud becomes visible. Pazu recognizes it from his father's descriptions as Laputa's hiding place. As they try to find a way in, the Goliath attacks again and the glider Sheeta and Pazu are riding is blasted away from the pirate ship. The children land in Laputa, only to find the city devoid of human life, having only a single robot among the ruins taking care of the grounds. This robot is implied to be "friends" with small animals. In the grounds is a gargantuan tree, whose roots have pervaded Laputa's base.
The Goliath arrives at Laputa, whereupon the soldiers plunder the city's vast treasures. The Tiger Moth is found wrecked on the surface, with Dola and the pirates being held captive. As Pazu attempts to rescue Dola, Sheeta witnesses Muska locating a hidden entrance to a large sphere that surrounds the city's core; she is subsequently captured and taken inside. Pazu frees the pirates and, after many difficulties, finds another way into the sphere.
Muska takes Sheeta into Laputa's core, a chamber holding a gigantic Volucite/Aetherium crystal that serves as the city's power source, and reveals that he is also an heir to the throne of Laputa. He takes control of Laputa and all its technology and demonstrates the power of the city to the army by beaming an immensely powerful blast toward the surface. He then activates hundreds of robots to wipe out the army and the Goliath while Dola and the pirates hide from the robots inside the remains of the Tiger Moth. Sheeta frees herself, steals back the crystal and runs through the core with Muska in close pursuit. Eventually, she finds Pazu and passes the crystal to him.
Muska corners Sheeta in the city's throne room. Pazu arrives and asks for a moment to talk to her, which Muska grants. Together, the two children decide to use the Spell of Destruction; with a single word, the pendant releases an enormous power surge that triggers the collapse of the city's core. Muska is blinded and subsequently falls to his death; Sheeta and Pazu are hurled into the tangle of roots from the giant tree. Afterwords they find their way back to the glider and leave Laputa.
The Dola pirates also survive Laputa's destruction aboard their moth fighters, and are overjoyed to be reunited with Sheeta and Pazu in midair. The pirates and the children bid each other a fond farewell and part ways. Meanwhile, the remains of Laputa, held together by the tree, continue to rise, until they apparently establish an orbit high above the earth.