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Supervillain Megamind and his arch-nemesis, the superhero Metro Man, are both aliens who were sent to Earth as infants before their planets were sucked into a black hole. Though both land in Metro City at the same time, Metro Man is raised in a mansion, while Megamind is raised in a prison. He goes to the same school as Metro Man, who is well-liked by his classmates. Megamind is bullied by everyone until he concludes his purpose is to be a supervillain, setting off a rivalry between him and Metro Man. As an adult, Megamind, aided by his fish-like companion Minion, frequently and unsuccessfully battles Metro Man for control of the city.

At the grand opening of the new Metro Man Museum, Megamind escapes prison, kidnaps reporter Roxanne Ritchi, and lures Metro Man to an abandoned observatory to rescue her. Once there, Metro Man collapses, claiming the copper-lined observatory roof weakens his powers; Megamind then blasts Metro Man with a sun-powered death ray, apparently killing him. Overjoyed that he has finally won, Megamind takes over the city and goes on a crime spree. However, he eventually becomes depressed and purposeless with no hero to fight.

Megamind decides to blow up the Metro Man museum to forget the hero, but sees Roxanne there and dehydrates the museum's curator, Bernard, into a small cube. Disguised as Bernard using hologram technology, Megamind talks to Roxanne, whose remarks inspire him to use Metro Man's DNA to create a new superhero to fight. Megamind perfects the formula, but accidentally injects it into Hal Stewart, Roxanne's dimwitted cameraman who is infatuated with her.