In the fictional city of Agrabah, Jafar, the Grand vizier of the Sultan, and his parrot Iago, seek the lamp hidden within the Cave of Wonders, but are told that only a "diamond in the rough" may enter. Jafar identifies a street urchin named Aladdin. Princess Jasmine, who refuses to marry a suitor, temporarily leaves the palace and meets Aladdin and his pet monkey, Abu. Aladdin and Jasmine become friends and eventually fall in love. When the palace guards capture Aladdin on Jafar's orders, Jasmine confronts Jafar to demand Aladdin's release, only for Jafar to lie to her that Aladdin has been executed.
Disguised as an old man, Jafar frees Aladdin and Abu from prison, and sends them to the cave, ordering them to retrieve the lamp. There, Aladdin finds a magic carpet and obtains the lamp. Unaware to touch nothing but the lamp, Abu grabs a red jewel, and the cave collapses. Aladdin hands over the lamp to Jafar, who throws both Aladdin and Abu back down into the cave, though not before Abu manages to steal the lamp back. Trapped, Aladdin rubs the lamp and meets the Genie, who is trapped inside of it. The Genie tells Aladdin that he will grant him three wishes. Aladdin tricks the Genie into freeing themselves from the cave without using a wish, and he uses his first to become "Prince Ali Ababwa" in order to woo Jasmine.
At Iago's suggestion, Jafar plots to become Sultan by marrying Jasmine. When Aladdin greets Jafar and the Sultan at the palace, Jasmine becomes upset at them. Refusing the Genie advising him to tell Jasmine the truth, Aladdin takes Jasmine on a flight on the magic carpet. When she deduces his identity, he convinces her that he dresses as a peasant to escape the stresses of royal life. After Aladdin sends Jasmine home, he is ambushed by Jafar, but is rescued from drowning by the Genie with his second wish. Jafar tries to hypnotize the Sultan into agreeing to his marriage to Jasmine, but Aladdin intervenes, exposing his evil plot in the process; however, Jafar spots the lamp and thus discovers Aladdin's true identity. He flees to his lair, and orders Iago to retrieve the lamp from Aladdin.
Fearing that he will lose Jasmine if the truth is revealed, Aladdin refuses to free the Genie in order to maintain his charade. Iago steals the lamp, and Jafar becomes the Genie's new master. He uses his first two wishes to usurp the Sultan, and become the world's most powerful sorcerer, exposing Aladdin's identity and exiling him, Abu, and the carpet to a frozen wasteland. However, they escape, and return to the palace, where Jafar tries to use his final wish to make Jasmine fall in love with him, but the Genie cannot grant the wish as it is beyond his power. Upon noticing Aladdin, Jasmine pretends to be interested to distract Jafar, and Aladdin tries to retrieve the lamp. Jafar catches on to the plan, stops Aladdin, traps Jasmine inside an hourglass, and overpowers Aladdin and his friends with his magic. Aladdin tricks him into using his last wish to become an all-powerful genie; now bound to his new lamp, Jafar ends up trapped inside it, taking Iago with him.
With the palace and kingdom returned to normal, the Genie sends Jafar's lamp far away into the Cave of Wonders, and suggests that Aladdin use his third wish to regain his royal title so the law will allow him to stay with Jasmine. Realizing that he has to be himself, Aladdin decides to keep his promise and frees the Genie. Realizing Aladdin and Jasmine's love, the Sultan changes the law to allow Jasmine to marry whom she chooses. The Genie leaves to explore the world, while Aladdin and Jasmine plan their marriage.
In the post-credits scene, a television segment feautres the chihuaha Ren saying goodbye to the viewers and kids watching the show, the good-natured cat Stimpy cries asking what will they do until then. Ren tells him that he could wash the hands or steal a bread, in which, Stimpy shakes his head that he doesn't like these ideas. Ren tells him he can play horsey with the Crocostimpy. Stimpy cheers up and beings playing horsey with his pet crocostimpy, ending the segment with him saying "Happy, Happy, Joy, Joy!" to pretend he is the elephant.
- Scott Weinger as Aladdin
- Robin Williams as Genie/The Peddler
- Linda Larkin as Jasmine
- Jonathan Freeman as Jafar
- Frank Welker as Abu
- Gilbert Gottfried as Iago
- Douglas Seale as the Sultan
- Jim Cummings as Razoul
- Corey Burton as Prince Achmed
- Charlie Adler as Gazeem
- Billy West as Ren Hoek
- Julie Kavner as Marge Simpson