Harry Potter lives with his abusive uncle and aunt, Vernon and Petunia Dursley, and their bullying, spoiled son, Dudley. On Harry's 11th birthday, he learns that he is a wizard. A man named Rubeus Hagrid tells him that he can attend Hogwarts, a school of magic. Hagrid explains that when Harry was an infant, a Dark wizard named Voldemort murdered his parents and tried to kill him as well. However, Voldemort's killing curse rebounded and seemingly destroyed him, leaving a lightning bolt-shaped scar on Harry's forehead. Unbeknownst to Harry, this event made him famous among wizards.

Hagrid takes Harry to Diagon Alley, where he buys a wand and other school supplies. A month later, Harry takes the Hogwarts Express to Hogwarts. He befriends Ron Weasley, a first-year student, during the journey. He also meets Hermione Granger and has a confrontation with Draco Malfoy. At Hogwarts, a magical Sorting Hat assigns each first-year student to a House. Harry, Ron, and Hermione are assigned to Gryffindor, although the Hat considers putting Harry in Slytherin.

Harry's broomstick flying ability earns him a place on the Gryffindor Quidditch team as the Seeker. He develops a dislike for the Potions professor Severus Snape, who seems to hate Harry. Harry and Ron discover a gigantic three-headed dog guarding a trapdoor one night. The two boys later save Hermione from a troll and begin a friendship with her. During Harry's first Quidditch match, his broomstick attempts to throw him off. Snape's strange behaviour during the match convinces Hermione that he jinxed Harry's broom. On Christmas, Harry receives an anonymous gift – his father's invisibility cloak. While using the cloak to explore the school undisturbed, he discovers the Mirror of Erised, which shows the viewer what they most desire. Harry sees his family in the mirror.

Harry, Ron, and Hermione learn that the three-headed dog is guarding a magical object called the Philosopher's Stone, which grants its user immortality. A centaur named Firenze warns Harry that Voldemort is plotting to steal the Stone to restore his body. When the headmaster, Albus Dumbledore, is lured away from Hogwarts, Harry and his friends fear the theft is imminent and descend through the trapdoor to retrieve the artefact. Various obstacles force Ron and Hermione to remain behind while Harry approaches the Stone. He encounters Professor Quirrell, the Defence Against the Dark Arts professor, who explains that he serves Voldemort and that it was he who jinxed Harry's broom. Quirrell attempts to retrieve the Stone from the Mirror of Erised, but cannot figure out how. When Harry looks in the Mirror, he feels the Stone drop into his pocket. Quirrell then reveals that Voldemort has possessed his body, and shows Harry Voldemort's face on the back of his head. Quirrell attempts to seize the Stone, but his flesh burns upon contact with Harry. As Harry and Quirrell struggle, Harry's scar begins hurting, and he passes out.

Harry awakens in the school's infirmary. Dumbledore explains that Harry survived because he is protected by a magical charm created when his mother died trying to protect him. Quirrell's hatred and greed caused him to burn upon contact with Harry, and Voldemort abandoned him to die. Dumbledore also reveals that the Stone has been destroyed. During the school's year-end feast, Gryffindor is awarded the House Cup. Harry then returns to the home of the Dursleys for the summer.