Sky High is the story of fourteen-year-old William Theadore Stronghold (Michael Angarano). Will is facing his first day of high school, which is even more daunting since he will attend his parents' alma mater. His parents were the school's most famous graduates ever, so he feels a lot of pressure to succeed. But to make matters worse, his parents are the world's greatest superheroes: the incredibly strong, nearly-invincible Commander (Kurt Russell) and flying Jetstream (Kelly Preston). The school is Sky High, a training ground for future superheroes and their sidekicks (or, as they prefer to be called, "Hero Support"). And worst of all, Will has no traces of superpowers, but he can not bear to tell his parents for fear of disappointing them.
The school floats in the sky by means of anti-gravity generators. It moves continually to prevent attacks from villains, and its location is only provided to drivers of the rocket-powered school buses. Will boards the bus with his lifelong friend Layla (Danielle Panabaker) and after a harrowing trip, gets his first glimpses of Sky High. Soon he meets bullies Speed (Will Harris) and Lash (Jake Sandvig); one runs at blinding speed and the other can stretch his body to incredible lengths. Will falls in love at first sight with student body president Gwen Grayson (Mary Elizabeth Winstead), a "technopath" who can control technology. Everyone seems to assume that Will, as the son of Commander and Jetstream, has amazing powers; Will is reluctant to correct this misconception.
After a welcome speech by Principal Powers (Lynda Carter), the students begin Power Placement. In this ritual, the students display their powers to Coach Boomer (Bruce Campbell), who will decide whether they will enter the "Hero" study track or the "Sidekick" track. Layla refuses to display her power (control of plants) to the coach, saying that she rejects labels and the "placement" system; Boomer places her in the Sidekick program. Under pressure in front of the other freshman (and to Boomer's disbelief), Will admits that he has no powers and is also consigned to Sidekick studies. He quickly makes friends with a number of other sidekicks-in-training, including: Zach (Nicholas Braun), who can emit a weak yellowish glow; Magenta (Kelly Vitz), who can transform herself into a guinea pig; and Ethan (Dee Jay Daniels), who melts into a puddle of goo.
The sidekicks' first class is with Mr. Boy (Dave Foley), a sad, forgotten one-time sidekick to Commander. The students quickly learn that despite the teachers' efforts, sidekicks are treated with considerable disdain and scorn compared to heroes. Will seems to accept his role as a second banana, but still seems unable to tell his parents; his father's effusive praise and revelation of hero secrets such as the "Secret Sanctum" lair make Will even more reluctant to admit the truth. Eventually, though, his parents discover his lack of powers; Commander in particular is unable to hide his disappointment.
Will also learns that he has already made an archenemy: Warren Peace (Steven Strait) hates Will because Commander sent his father, Baron Battle, to prison for four life terms. At first, Warren simply glares darkly at Will from a distance; one day in the cafeteria, however, Lash trips Will and makes him drop his tray onto Warren. Ignoring Will's apologies and explanations, Warren explodes (almost literally), hurling fireballs wildly at Stronghold from his flaming hands. Cornered beneath a table with Warren standing on top, Will discovers that he has finally gained super strength, lifting the table and hurling Warren through walls. Contrary to his wishes, Will is quickly moved from the Sidekick class to a schedule of Hero studies, although he is paired with Gwen in Mad Science taught by Mr. Medulla (Kevin McDonald).
As Gwen takes an interest in Will and his family, Will begins to alienate his sidekick friends, including Layla. Gwen invites Commander and Jetstream to attend the school's homecoming dance as guests of honor, where they will receive "Superheroes of the Year" awards. Incredibly, Gwen also agrees to be Will's date for the dance. Meanwhile, Layla makes a tentative connection to Warren, who works at a restaurant where Will had forgotten to meet her. Warren, like everyone else except Will, realizes that Layla is in love with Will; when Will bubbles happily that Gwen is his date, she lies that she is going with Warren. Eager to help in any scheme that could humiliate Stronghold, Warren later agrees to the charade.
Gwen, however, soon begins to exert a sinister influence. She tricks Will into throwing a party while his parents are away, then subtly pressures him into admitting her into the Secret Sanctum. While she distracts Will with sweet talk, Speed steals "The Pacifier", a mysterious weapon Jetstream and Commander had collected years earlier after defeating a villain named Royal Pain. When Layla appears at the party, Gwen convinces her that Will is embarrassed to associate with a lowly sidekick, and laughs at her crush on him. When he sees Layla leaving in tears, Will confronts Gwen and breaks up with her after discovering her elitist attitude. Devastated at the betrayal and the loss of his friend, Will declares that he will not go to homecoming. His parents feel obliged to keep their promise, however, and reluctantly attend.
Home alone, Will notices a bizarre resemblance between Gwen and an unpopular girl named Sue Tenney in his parents' yearbook. One picture shows her in the Science Club holding a weapon that looks exactly like the Pacifier; dumbstruck, Will notices that the weapon is missing from the Sanctum. He concludes that Sue was Royal Pain, and that Gwen must be her daughter bent on revenge. He enlists his school bus driver to take him to Sky High.
Before Will can arrive at the dance, Gwen reveals that she is Royal Pain. She proceeds to shoot the Commander and Jetstream with the Pacifier, which transforms them into infants. Royal Pain and her jester-like sidekick Stitches begin "babyizing" all of the students and faculty; only Layla, Warren, Zach, Magenta and Ethan are able to clamber into ventilation ducts to safety. As Royal Pain's collaborators, Speed, Lash, and a self-cloning cheerleader named Penny (played by twins Malika and Khadijah) pursue the escapees, Will confronts Royal Pain. Gwen reveals that she had been reverted to childhood when the Pacifier exploded years before during her defeat by the super duo, and was later found and raised by Stitches (who pretends to be her father earlier in the movie). Will and Royal Pain battle each other in the gymnasium. After Layla immobilizes all of Penny's clones with vines, Penny confesses that there is a device attached to the school's antigravity generator, which will cause the school to crash to the ground. The sidekicks race to attempt to find and disable the device, with Magenta frantically trying to chew through the wires.
Royal Pain hurls Will through a window and off of the floating school, but he realizes to his surprise that he can also fly. He finally incapacitates Royal Pain, but the device activates and the school begins to fall. Will flies beneath the school and attempts to stop its descent, but its mass and speed is too much for him to overcome. Magenta severs the main wire with just enough time for Will to stop the school's plummeting.
The infant mad scientist Medulla finds a way to reverse the effects of the Pacifier and restores everyone to their normal ages. Commander and Jetstream give their Heroes of the Year award to the group of kids who saved the day, pronouncing the sidekicks to be true heroes. Gwen, Speed, Lash, Penny, and Stitches are stuck in power-stripping detention while Homecoming resumes, with Zach and Magenta dancing together while Will and Layla kiss ewwwwwwwwwwwwww.