In 1986, Saroo, a five-year-old boy, lives with his elder brother Guddu, his mother and his younger baby sister in Khandwa, India. Guddu and Saroo steal coal from freight trains to trade for milk and food. One day, Saroo follows his brother to a job and they arrive at a nearby train station, where Saroo decides to stay back and take a nap. Guddu tries to wake him up, but Saroo is too tired. When Guddu does not return, Saroo searches for him and boards a train presuming Guddu is aboard. He falls asleep again in one of the compartments, and wakes up to find the train in motion. After several days, it arrives in faraway Calcutta, where he does not understand the local Bengali language. He stands at a ticket counter and tries to obtain a ticket home, but the attendant does not recognise the name of his village, which Saroo says is "Ganestalay". He spends the night in the station with some streetchildren, but is then woken up and forced to run when a group of men try to kidnap them.
Saroo continues to wander around the city before coming across Noor, a seemingly friendly woman who takes him back to her apartment. She tells Saroo that a man named Rama will help him find his way home. Saroo runs away, sensing that Noor and Rama have sinister intentions, and escapes Noor when she chases after him. After two months of living near the Howrah Bridge, Saroo is taken to the police by a young man. Unable to trace his family, they put him in an orphanage. Three months later, Saroo is introduced to Mrs. Sood, who tells him she has placed an advertisement about him in several local newspapers, but no one has responded. She then tells him that an Australian couple is interested in adopting him. She begins to teach Saroo basic English and he moves to Hobart, Tasmania in 1987, under the care of Sue and John Brierley, where he slowly starts to settle in with them. A year later, they adopt another boy, Mantosh, who has trouble adjusting to his new home and suffers from rage and self-harm.
Twenty years later, Saroo, now a young man, moves to Melbourne to study hotel management. He starts a relationship with Lucy, an American student. During a meal with some Indian friends at their home, he comes across jalebi, a delicacy he remembers from his childhood. Saroo reveals that he is not from Calcutta and that he has been lost for more than twenty years, and his friends suggest he use Google Earth to search for his hometown in India. Saroo begins his search, but over time disconnects from Lucy, overwhelmed by the thought of emotions his family must have gone through when he was missing.
Saroo visits Sue, whose health is deteriorating, and learns that she is not infertile, but had chosen to help others in need through adoption, believing that there were already too many people on Earth. After reconciling with Lucy, Saroo spends a long time searching fruitlessly for his hometown. One evening, while scanning Google Earth, he notices the rock formations where his mother worked, and then finds the area where he lived: the Ganesh Talai neighbourhood of the Khandwa district. He finally tells his adoptive mother about his search, and she fully supports his efforts.
Saroo returns to his hometown, and with the help of a local English speaker, has an emotional reunion with his biological mother and sister. He also learns that Guddu is dead. Saroo's mother never gave up hope and believed that one day her missing son would return, and never moved away from the village. The film ends with captions about the real Saroo's return to India in February 2012, including the fact his brother Guddu was killed by a train the same night that they were separated as children. Photos of the real Australian family are shown, as well as footage of Saroo introducing Sue to his biological mother in India, who deeply appreciates Sue's care for her son. Saroo later learned that he had been mispronouncing his own name, which was actually Sheru, meaning "lion".