In Moose Lake, Minnesota, a crate containing an orphaned male Spix’s macaw hatchling that was smuggled out of Brazil falls from a truck and is found by Linda Gunderson, who names him Blu. Fifteen years later, Blu is highly domesticated and unable to fly, and is frequently ridiculed by the Canada geese that come by Linda’s bookstore. Ornithologist Túlio Monteiro invites Blu and Linda to Rio de Janeiro for Blu, the last known male of his species, to mate with the last known female. At Túlio’s aviary in Rio, Blu meets his prospective mate, the fiercely independent Jewel who longs to flee back to the wilderness.

Later at night, while Linda and Túlio are out, the macaws are captured by an orphaned boy named Fernando and a sulphur-crested cockatoo named Nigel, both of whom work for a gang of smugglers led by Marcel, who wants to leave the country quickly to sell Blu and Jewel on the black market. While Fernando begins to regret his actions, Nigel tells the macaws of his disdain for “pretty birds” after he was replaced by a parakeet on a television show. Blu’s familiarity with cages allows him and Jewel to escape, though they are forced to travel on foot as Marcel had chained their legs together with legcuffs. Fernando helps Linda and Túlio search for the macaws the next morning, while Blu and Jewel meet the toco toucan Rafael, whose bulldog friend, Luiz, will remove their chain.

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