Charlie Bucket lives in poverty with his parents and grandparents in a town which is home to a world-famous chocolate factory. One day, Charlie's bedridden Grandpa Joe tells him about Willy Wonka, the factory's eccentric owner, and all of his fantastical candies. Rival chocolatiers sent in spies to steal his recipes, forcing Wonka to close the factory and disappear. He reopened years later, but the gates remain locked and nobody knows who is providing the factory with its workforce.
The next day, the newspaper announces that Wonka has hidden five Golden Tickets in Wonka Bars; the finders of these tickets will be invited to come and tour the factory. The first four tickets are found by gluttonous Augustus Gloop, spoiled Veruca Salt, gum-chewing Violet Beauregarde, and television addict Mike Teavee. One day, Charlie buys a Wonka Bar with some money he found in the snow; the bar contains the fifth and final ticket. Upon hearing the news, Grandpa Joe regains his mobility and volunteers to accompany Charlie to the factory.
On the day of the tour, Wonka welcomes the five children and their parents inside the factory, a wonderland of confectionery creations that defy logic. They also meet the Oompa-Loompas, a race of impish humanoids who help him operate the factory. During the tour, the other four children give in to their impulses and are ejected from the tour in darkly comical ways: Augustus falls into the Chocolate River and is sucked up a pipe, Violet turns into a giant blueberry after chewing an experimental stick of three-course dinner gum, Veruca and her parents fall down a garbage chute after the former tries to capture one of the nut-testing squirrels, and Mike is shrunk down to the size of a chocolate bar after misusing the Television Chocolate device despite Wonka's warnings. The Oompa-Loompas sing about the children's misbehaviour each time disaster strikes.
With only Charlie remaining, Wonka congratulates him for "winning" the factory. Wonka explains that the whole tour was designed to help him find a worthy heir to his business, and Charlie was the only child whose inherent genuineness passed the test. They ride the Great Glass Elevator and watch the other four children leave the factory before flying to Charlie's house, where Wonka invites the entire Bucket clan to come and live with him in the factory.
