The original storyline opens with a Buzz Lightyear video game very different from the final film. Hamm and Rex are watching Buzz play as he tries to rescue a space princess from Emperor Zurg while Woody is looking over the calendar on his doodle pad, stating that Andy would return from camp in three days. He hears a hammering noise outside and goes over to the window to see what it is. On the way up, Bo Peep quickly grabs Woody to give him a kiss (a loose thread from Woody's pants gets caught on a dresser screw in the process and makes a rip). Woody finally sees Ms. Davis outside putting up a "Garage Sale" sign. He tries to keep it a secret from the other toys, but Rex finds out also and everyone starts to panic. Woody then reassures everyone that garage sales are only for old toys, to which Mr. Potato Head comments on Woody being the oldest toy there by calling him an antique, but while Woody's talking his ripped stitching pops open and stuffing starts coming out of his pants. Frustrated, Woody climbs up Andy's bed and sits in an open window to relax. He decides to get out onto the roof to get away from the others and stands on a shingle, but the shingle slips loose causing Woody to slide down the roof and land in a box at the garage sale. After seeing Woody fall from inside, the toys go over to the window just as Al McWhiggin walks over and finds Woody in the box. The toys watch helplessly as Al steals Woody and drives off in his car, but not without Buzz getting a quick look at his license plate while looking through Lenny.
That night, the toys hold a memorial in front of one of Andy's drawings of Woody while Buzz is busy trying to decipher the license plate with Mr. Spell and Etch A Sketch until finally he gets "Al's Toy Barn". Forming a rescue party, Buzz, Slinky, Rex, Hamm, and Mr. Potato Head set off to find Woody. Meanwhile, Al has already taken Woody to his high-rise penthouse apartment, where he puts Woody on a workbench and restores him good as new (even restoring the burnt mark on his forehead that was made by Sid Phillips). There are shelves of boxes of various parts of his toy collection including Captain Platypus, Dinky Doodle's Playhouse, and Rococco the Clown, where Al takes out some toys from a Woody's Roundup box and puts them on display pillows with Woody. After Al leaves, Woody frantically tries to find a way out as he is introduced to Prospector, Bullseye, and Señorita Cactus. Bullseye (who is able to talk) gives Woody a friendly greeting but Prospector and Señorita Cactus are disgusted to hear him say that he had been played with and "corrupted" by Andy, while making a fuss over how shiny and polished they are. They reveal to Woody that he's a collectible like them and the star of an old 50's TV show, the shock of which causes Woody to faint.
The next day, Woody is continuing to break out of the apartment by trying to open the door from the other side, using his belt and bandana to lasso the knob, as Bullseye comes over to talk. Bullseye lets Woody in on his secret that he misses being played with by a kid and has made many escape attempts himself, but always failed. Woody then spots a skylight up above them and starts thinking. He later builds a stack of Woody's Roundup memorabilia to try and climb up to the skylight while Prospector and Señorita Cactus are playing chess with each other. Woody starts pounding on the skylight when it doesn't open and the stack falls over sending him back down. Prospector and Señorita Cactus then start plotting to each other on how to break Woody's spirit so he won't want to leave anymore. They bring Woody over to a large book showing him the price guide of how much he's worth. Curious, Woody takes a peek and is overwhelmed by how big the numbers are. From there they begin manipulating him over to their side, while Woody starts losing his new friendship with Bullseye.
Buzz and the other toys finally make their way to a busy highway, but by this point Buzz had already lost faith in himself wondering why a mere toy like him is even attempting to go all this way, until they see Al's Toy Barn across the street. Rex excitedly runs across the road and right through the traffic without getting hit and the other toys follow, but as Buzz tries to go across he gets hit by the curb feeler of a car, leaving a scuff mark deep in his leg. Rex quickly goes back for Buzz and brings him to the other side as they head towards the store. By the time they get inside it's nighttime and the guard is locking up. Slinky, Rex, Hamm, and Potato Head find Al on the phone in his office, but Buzz had gotten sidetracked and fallen behind when he discovers the Buzz Lightyear aisle. There he meets a new Ultra Buzz Lightyear 2000 who acts just as deluded as he used to be. Buzz tries to explain to him that he's really a toy but the two of them fight, in the process bumping into an Emperor Zurg display and causing the box to fall onto the floor. Zurg breaks out of the box and pulls out his Ion Blaster as he starts shooting at the two Buzz Lightyears. Ultra Buzz avoids the balls with a series of acrobatics, but Buzz walks right through the balls over to Zurg and pulls out his batteries, leaving Ultra Buzz surprised as to how he could be unharmed. Believing himself not worthy enough to be the true Buzz Lightyear, Ultra Buzz gives Buzz his utility belt and they part ways. Buzz, now having a regained confidence to save Woody, joins the others as they hide inside Al's bag as Al leaves the store and gets into his car.
After Al returns to his apartment, the toys get out of the car and follow after him. Buzz tells the others to wait as he climbs up the building using a pair of suction cups (taken from a dart gun Rex found back at Al's Toy Barn). Meanwhile, Al is showing off his displayed collection to three artsy sophisticates named Emerson, Quentin, and Theatrica, who are opening a Museum of 50's Objects in New York where Al is planning to sell his entire collection. As they step out of the room, Woody, Prospector, and Señorita Cactus begin to celebrate. Buzz eventually makes his way up to the skylight at the top of the building and lowers himself inside with the grappling hook from his new utility belt, jumping right into Woody's conversation with the Roundup Gang. To Buzz's disappointment, Woody has already forgotten his real friends, but Buzz still tries to rescue Woody by force, likening Woody's experience to being brainwashed by a cult. Buzz ties Woody up with his own pull string and takes him out the skylight while Woody, not wanting to leave, puts up a fight. Up on the roof, Buzz unties Woody as he tries to reason with him and leaves him with the choice of coming back to Andy or staying with the Roundup Gang while Prospector and Señorita Cactus emerge from the skylight. As Woody thinks, the wind blows his hat off his head and it lands on a flagpole dangling high above the street. Woody tries to get the hat back but loses his balance and grabs the end of the flagpole with his hand just as he's about to fall off. He calls out to Prospector and Señorita Cactus to help him, but neither of them want to risk their lives over a "Hatless Woody". Buzz jumps in and brings Woody safely back onto the roof, and Woody reveals that he actually caught his hat on one of the spurs of his boots. Prospector and Señorita Cactus go back to being friendly again, but have already let out their true colors by showing that they only cared about Woody for his value. As Woody and Buzz start to leave, Woody remembers Bullseye and goes back inside for him.
As Woody and Buzz are helping Bullseye up the skylight, Slinky, Rex, Hamm, and Potato Head spill out of the room's air vent after deciding to go in and help Buzz. Just then, Al enters the room and starts packing the Woody's Roundup toys into their boxes to leave for the museum. Buzz and the others make their way back down the apartment from the top of the glass elevator and climb onto the bumper of Al's car as it pulls away. As they try to get the trunk open, Woody opens it from the inside and lets them in while they think of how to stop Al's car. Woody then has Buzz lower him out the car and jams the tailpipe of Al's car using his hat, which forces Al to stop at a Dinoco gas station. As Al gets out of the car, the toys slip into the interior of the car through a hole leading to the back seat and take control of the car, driving off in front of Al. Thinking he's being carjacked, Al steals a Pizza Planet truck conveniently nearby (much like the first Toy Story) and follows in hot pursuit. Woody starts throwing Woody's Roundup memorabilia out of the trunk to slow Al down, not noticing Prospector and Señorita Cactus coming out of their boxes. They try to stop Andy's toys from driving the car, but Woody tells them they've already lost as he puts on his hat, now a charred mess, and proclaims that he's worthless to them. Angered, Prospector and Señorita Cactus start to go after Woody, but Bullseye comes in and buck-kicks them out of the car. Al sees them land on the road and stops the truck, but before he can get to them they get picked up by two kids on bikes, whom Al fights with as he tries to get them back. The toys are now back in Andy's neighborhood and park Al's car in front of their house as they head inside, just as Ms. Davis' minivan is seen coming up the street. Andy has returned from camp and is running up to his room. He finds his toys just as he left them (although for a moment questioning Buzz's scuff mark and Woody's charred hat) and spots Bullseye on his bed. He tells Ms. Davis thanks and starts playing with his toys.