On a rainy day in October 1988, Bill Denbrough gives his seven-year-old brother Georgie a sailboat made from notebook paper. Georgie takes the boat out onto the street to sail it in the gutter and is unable to stop it from sailing down the storm drain. As Georgie peers into the Storm drain, he’s startled by the presence in the sewer of a strange man dressed as a clown who introduces himself as “Pennywise the Dancing Clown”. Pennywise claims that the storm blew the whole circus, including him, into the sewers and offers Georgie his boat to lure the boy closer. When Georgie reaches in, Pennywise grabs his arm and bites it off before dragging the boy into the sewer.
Eight months later, in June 1989, on the last day of term at Derry High School, Bill and his friends Richie Tozier, Eddie Kaspbrak, and Stanley Uris run afoul of bully Henry Bowers and his gang. At the same time, Beverly Marsh, a young girl abused by her father and bullied mercilessly for being a “slut”, runs into Ben Hanscom, a kind but overweight new kid who secretly has a crush on her.
While making a delivery to a local butcher shop for his grandfather, homeschooled Mike Hanlon encounters Pennywise before nearly getting run over by Henry. Bill, still haunted by Georgie’s disappearance and the resulting neglect from his griefstricken parents, discovers that his brother’s body may have washed up in the marshy wasteland called the Barrens and recruits his friends to check it out. Meanwhile, Ben Hanscom finds a book on Derry’s history while in the town library, learning the town has been plagued by mysterious unexplained tragedies and child disappearances for centuries. Ben is then lured to the basement by mysterious easter eggs like the ones from the Kitchener Ironworks incident, narrowly escaping Pennywise in the form of a burnt, headless boy. But Ben runs into Henry’s gang, fleeing into the Barrens when Henry attempted to carve his name on the boy’s stomach. Ben runs into Billy’s group as they found the sneaker of a missing girl named Betty Ripsom while searching for Georgie, getting supplies from a local pharmacy to treat his wounds with Beverly’s help. At the same time, Henry’s friend Patrick Hockstetter is killed by Pennywise while wandering in the sewers for Ben.
The next day, after the group spend a day swimming, they each have a nightmarish encounter with Pennywise starting with Eddie passing an abandoned house on Neibolt Street where he is attacked by the clown in the form of a rotting leper. Stan has a traumatizing ordeal when the clown assumed the form of an animated figure from a painting. At her home, Beverly hears the the voices of several missing children, including Patrick, coming from her bathroom sink. A clog of her cut hair ties her to the sink as she is covered in the erupting blood that coats the bathroom. Her father comes in to investigate and Beverly realizes that Mr. Marsh cannot see the blood. Later that night, Bill is lured into his house’s basement by what he thought is Georgie and narrowly escapes Pennywise. Soon after, helping Beverly clean her bathroom as they can see the blood, Bill and his friends discover Henry’s gang beating up Mike. They chase the bullies off with rocks and befriend Mike.
A few weeks later, the group, who now refer to themselves as “The Losers Club”, come to realize that they are each being terrorized by the same entity. Noticing that “It” assumes the appearance of what they fear, Ben deduces that the creature wakes up every 27 years to feed on the children of Derry before it hibernates again. While in Bill’s garage, nearly killed by Pennywise, the group determines that It moves about unseen by using the sewers around Derry’s well, on which 29 Neibolt Street is build, to move around unseen. After Bill, Richie, and Eddie enter the house while the others remain outside, Pennywise separates the trio and attempts to pick them off starting with Eddie after he broke his arm while falling through a hole upstairs. But the rest of the Losers arrive and Beverly impales It through the head with a fence post, the clown limping off into the well after slashing Ben. Eddie’s mother arrives and is horrified by her son’s broken arm, taking him away. The group begins to splinter, with Richie, Stan, and Mike abandoning the others of fear when Bill insists that they continue to hunt It.
One day in August, Beverly manages to incapacitate her father with a porcelain toilet lid when he attempts to rape her. But she is abducted by Pennywise, with Bill reassembling the Losers and mount a rescue. It responds by giving Henry, who is gradually becoming insane, his missing switchblade while compelling Henry to murder his abusive father before sending him to kill the Losers. At the Neibolt house, the others manage to reach a pathway in the well while Mike is attacked by Henry. During the struggle, Mike pushes Henry down the well, where he seemingly falls to his death. It lures Stan from the others to eat him, only to be chased off when the others arrive. They then find It’s lair in an underground cooling tower, containing a mountain of decaying circus props and children’s belongings, where they find a catatonic Beverly hovering below the floating corpses of the missing children. While the others pull Beverly to the ground, Ben’s kiss restoring her to consciousness, Bill uses Mike’s Captive bolt pistol in an attempt to kill It when the creature attempted to trick him as Georgie. But It reverted to Pennywise and grabbed Bill, offering to spare the other Losers if they allow him to eat their friend. Instead, they break Bill free and brutally wound It despite its attempts to use their fears against them. Bill coldly tells the wounded Pennywise that they know It needs their fear to survive, and that they are now effectively starving the creature by making It fear them. Knowing he has no more power over them while beginning to dissolve, It escapes into a deep pit and the floating children float back into the ground. Upon discovering Georgie’s yellow raincoat, Bill accepts his brother’s death and emotionally breaks down while the others comfort him.
One month later, Beverly informs the group of a vision she had while catatonic from seeing It’s deadlight, where she saw them fighting the creature as adults. The Losers form a blood oath that they will return to Derry in 27 years if It returns and destroy the creature once and for all. After the other Losers depart one by one, Beverly tells Bill that she is moving to live with her aunt in Portland the following morning. Before Beverly leaves, Bill reveals his true feelings and they kiss.
In an after-credits audio clip children continue to sing “Oranges and Lemons”, while Pennywise laughs maniacally indicating that he has survived.