George is a curious monkey living in an African jungle. "The Man in the Yellow Hat" meets George and places his yellow straw hat on the ground. A curious George puts it on his head, blocking his sight. With George unable to see, The Man puts him in a bag, capturing him.

The two go on a rowboat to a big ship, George being sad but still curious. Once on the ship, The Man gets George out of the bag and tells him that The Man is taking him to a big zoo in a big city and asks George not to get in trouble. George promises but sees seagulls and tries to fly like them. He falls into the water, struggling to swim, and the ship's crew save him by throwing him a lifebelt. After a long trip, The Man and George reach land and go to The Man's home. After having a meal and smoking a pipe, George becomes tired and falls asleep in his bed in large, human-sized pajamas.

The next morning, The Man telephones the zoo. When he leaves, George, being curious, uses the telephone. He dials the numbers on the phone over and over again, and accidentally telephones the fire station. When George says nothing to the firemen, they think there is a fire, and the map locates George's signal. After the signal highlights George's location on the map, the firemen rush on their fire engines to The Man's house. When the firemen find no fire, they arrest him for the false alarm. They tell George that since he fooled the fire department they will have to shut him up in a prison where he cannot do any more harm.

George wanted to get out so he climbed up to the window to try the bars. At that moment, a watchman comes in and climbs on a wooden bed to catch George. However, he's heavy that the bed tips over and pins him against the wall, stalling him. George is able to slip past and escape through the open door and climbs onto the roof, walking across the power lines above a guard's head.

He finds a man selling balloons. Wanting a red balloon, George tries to grab it but accidentally grabs all the balloons instead. The wind blows the balloons and George away over the big city (from his view, the houses and people look like toy houses and dolls), then he lands on a traffic light pole, mixing up traffic. The Man sees George from his car, and George slides down the pole into his arms. The Man pays the balloon man for the balloons, and then drives George to his wonderful new home at the zoo.