Percy Jackson recounts the story of Thalia Grace: pursued by monsters on their way to Camp Half-Blood, a young Thalia sacrificed herself to save her friends, Annabeth Chase, Luke Castellan and Grover Underwood. Her father Zeus honored her sacrifice by turning her into a tree, which forms a protective barrier around the camp, keeping everyone within a safe zone. In the present day, Percy's quest for Zeus's bolt[a] has faded in popularity and he is called the one-quest wonder by camp bully Clarisse La Rue, but is still supported by Annabeth and Grover. He is joined at camp by a young cyclops named Tyson, a previously unknown son of Poseidon, and therefore his brother, albeit the son of Poseidon and a sea-nymph, rather than a human.
After an attack by a Colchis bull, the campers discover Thalia's tree has been poisoned by Luke and the barrier is vulnerable. Percy consults the Oracle, who tells him of a prophecy of a half-blood of the eldest gods either saving or destroying Olympus. Chiron tells Percy that he is the only living human half-blood of the eldest gods, so the Prophecy may refer to him. Annabeth and Grover learn about the Golden Fleece, which has the power to heal anything, and propose a quest to retrieve the Fleece and use it to heal Thalia's tree. Counsellor Mr. D claims the idea as his and chooses Clarisse to lead the quest.
Percy, Grover, and Annabeth set off without being chosen, joined by Tyson. They leave camp on the Chariot of Damnation (a New York City cab), where the three drivers (the Graeae) tell Percy more about his prophecy and coordinates for the Sea of Monsters (the Bermuda Triangle). The group is ejected in Washington D.C. for lacking drachmas, where Grover is kidnapped by some of Luke's cronies. The others, with the help of Hermes, track him down to Luke's yacht, the Andromeda, which they reach riding Hippokamposes. On board, they meet Luke (joined by other disillusioned demi-gods,) who reveals his plan to have Kronos the titan destroy Olympus by reviving him with the fleece and locks the group in the brig, but Percy uses his ability to manipulate water to break them free.
Escaping the yacht, they are consumed by Charybdis, where they discover Clarisse who is also in the monster's stomach. They work together to escape by shooting a hole through Charybdis's gut, then chart a course to Circeland, off the coast of Florida. There they discover Polyphemus's lair, where the fleece is kept and Grover is in disguise working for the cyclops. They rescue Grover, retrieve the fleece, and trap Polyphemus in his cave. Luke ambushes them and shoots at Percy with a crossbow for not handing over the fleece, but Tyson takes the bolt and falls into a roaring stream. Luke takes the fleece and the group hostage.
As Luke begins reviving Kronos from his sarcophagus, Annabeth encourages Percy to take leadership. The team escapes and Percy fights Luke over the fleece. Luke defeats Percy, but he is saved by Tyson, who survived his injury by being healed by the water, as he is Poseidon's son. Kronos rises from the sarcophagus and consumes Luke, Grover, and several other demi-gods before battling Percy. Percy realizes that his sword is the "cursed blade" of the prophecy and slices Kronos into pieces imprisoning the titan in the sarcophagus once again. Those eaten are regurgited with Luke landing in Polyphemus's Lair and presumably eaten. Annabeth is impaled from behind by the Manticore, who is killed by Clarisse in turn, and dies in Percy's arms, but is resurrected by the fleece.
Percy gives Clarisse the fleece and they return to Camp Half-Blood, where she places it on Thalia's tree. The next day, Thalia is found alive, as the fleece was powerful enough to resurrect and return her to human form while keeping the tree as protection for Camp Half-Blood. Percy realizes that Thalia, the daughter of Zeus, is another possible child referred to in the prophecy about Olympus.
