Perseus (Percy) Jackson, a troubled youth with ADHD and dyslexia, vaporizes his math teach with a magic sword after she turns into a monster. Though no one believes him, Percy is certain this transpired. At the end of the school year he overhears his friend Grover and his Latin teacher speaking about the event confirming something is going on. With school over, Percy heads back to New York where his mother has planned a trip to the beach. That evening, they are forced to flee a hurricane with Grover (who arrived suddenly in the night). Grover and Mrs. Jackson are heading to camp Half Blood when they are attacked by a Minotaur and their vehicle is hit by a bolt of lightning. In the fight with the monster Percy discovers Grover is a satyr, his mother disappears in a shower of golden light, and Percy kills the Minotaur. Upon waking a few days later, a centaur named Chiron (the Latin teacher) reveals that the Greek gods are real, and that Percy"s father is one (Poseidon, a fact we soon discover).

After learning that he is the son of the sea god, Percy is given a quest to recover Zeus" master bolt - which was stolen at the last winter solstice. Percy is joined on the quest by Annabeth (a daughter of Athena) and Grover. Their quest will take them to Los Angeles (and the entrance to the underworld) because it is believed that Hades has taken the master bolt. Along the way they battle the Furies, Medusa, and a chimera. Percy also begins having dreams of a voice coming from Tartarus in the underworld.

In Denver, the three are asked by Ares to recover his shield from an amusement park. After recovering the shield, Ares gives Percy a new backpack and a ride to LA. The ride makes a stop in Las Vegas, where the three nearly get trapped in the Lotus Casino (a magical casino where time passes rapidly and the guests do not age).

They eventually arrive in the Underworld and confront Hades. It turns out he has had his Helm of Darkness stolen as well. Percy also discovers that Ares was using Percy when the master bolt suddenly appears in the backpack. Hades offers Percy a deal - the bolt and helm for his mother (who is not actually dead). Percy, however, realizing what Ares has done, escapes the Underworld and confronts the war god

Percy and Ares battle and Percy is actually able to draw blood (with the aid of the power of the sea). Ares flees, giving Percy the Helm. Percy turns the Helm over to the Furies, who have seen everything and return to Hades with the news. Percy returns the bolt to Zeus and meets his father who is proud of what he has done. Due to his success, Grover receives his searchers license (to find the missing god Pan). Mrs. Jackson is also returned to the living as a reward for Percy recovering the Helm for Hades

Back at camp, we learn that Luke (a camper who travelled to camp with Annabeth and Thalia - the daughter of Zeus who died protecting Luke and Annabeth and became a pine tree 5 years ago that now protects the camp) is now serving Kronos, the god of the Titans, in a bid to destroy the Olympians.