We then switch to a bus about to stop at Monsters University, where a 18-year old Mike says farewell to the other monsters in the bus, but creeps them out due to the facts he knows about them. Mike arrives at MU and is extremely excited. After taking a picture for his ID card and visiting the school, he finally goes to his room, meets and befriends his roommate, the nerdy and shy Randall “Randy” Boggs, who has trouble controlling his invisibility power. When Randy suddenly disappears while greeting his new friend, Mike finds his power awesome instead of weird and tells Randy to use it more, to the chameleon’s shock. Randy soon gets rid of his glasses under Mike’s suggestion because they don’t turn invisible when he does. While Randy is worried about not being able to impress the cool kids, Mike is laid back and confident in his scaring abilities.
At their first day of class, Mike, Randy and the other students are greeted by the orange, dinosaur-like Professor Knight, who teaches Scaring. When Professor Knight explains how the class will go, the dean of the school, the dragon-like, millipede-legged Abigail Hardscrabble suddenly flies down the classroom and explains what it takes to be a great Scarer, being a legendary Scarer herself. After learning that failing an exam at the end of the semester will kick him out of the Scare Program, Mike becomes slightly worried, but is still confident. Suddenly, a student arrives late, James P. “Sulley” Sullivan, a natural Scarer. Despite having a lot of potential, Sulley never studies and always forgets his pencils and books whenever he goes to class.
Later that day, while Mike is studying scaring, Sulley breaks into his room to get back Archie the scare pig, rival college Fear Tech’s mascot. Mike ends up riding Archie after the pig stole his MU cap. Mike and Sulley end up stopping the pig in its tracks, although only Sulley gets the credit for it. Sulley’s acts attract the attention of many fraternities, including Omega Howl and Jaws Teta Chi, but the top fraternity, Roar Omega Roar, gets Sulley’s attention. While Roar Omega Roar’s president, Johnny Worthington, talks to Sulley, Mike tries to get their attention and follow them to a party, but is stopped by the purple, one-eyed, crab-like Chet Alexander. Sulley tells Mike that the party is for scare students who “have a chance” after Mike says that he is indeed, a scare student. This event in particular causes an intense rivalry between the two. The following scenes show Mike and Sulley competing against each other in various aspects, including natural scaring, which Mike lacks, and actually knowing about scare tactics, which Sulley lacks.
The day of the Final Exam arrives, and the RORs have threatened Sulley of removing him from the fraternity if he fails the exam to Mike. The Final Exam consists of a screen-simulator where each monster must perform the appropriate scare tactic assigned to each mock child in order to pass the exam. Roar Omega Roar watches from the back of the lecture hall and Sulley sees Mike studying. In order to mock him, Sulley pushes Mike's books off his desk, causing the two to struggle. Mike begins to roar at Sulley, to show him what he's capable of. Unimpressed, Sulley roars back. That goes on until they gain the attention of Dean Hardscrabble. Suddenly, Sulley trips over one of Mike's books and stumbles into Dean Hardscrabble's scare can, containing her record-breaking scream inside. It drops to the floor and breaks open. Strangely enough, Hardscrabble acts quite calm about it, and she continues Mike and Sulley's exam all the same. She asks Mike to inform her which scare would be used for a child afraid of lightening, he remembers the scare tactic perfectly but when demonstrates, Hardscrabble dismisses him before he can even try, telling him he is just not scary enough and to leave the program.
Mike is so upset that his dream of being in the Scare Program has ended so soon, that he throws his book at the wall knocking down his calendar revealing a poster of the "Scare Games". That gives him the idea for getting out of his misery. He runs out his dorm room, past an angry Sulley who follows him. The sign-up for the Scare Games is nearing a close as the school gathers to listen to Dean Hardscrabble explaining how to win the games you must be the "most fearsome monsters on campus!". Just before the end of the sign-up, Mike stands up on a car and shouts out his sign up for his new faternity - Oozma Kappa! Everyone breaks out in a laugh as Oozma Kappa isn't really the scariest group of monsters on campus. Dean Hardscrabble tells Mike he is making a fool out of himself, and that he will never win. Mike proposes a wager with Hardscrabble - if OK wins, they must be allowed into the Scaring Program. She agrees, but also tells Mike that if they lose, he will leave Monsters University. And she also tells him there must be six members to join the games, and they only have five, as the rules of the games only count bodies as team-members, and so the multi-headed monster Terri and Terry count only as one. Mike, starting to get desperate as his plan starts to fail, asks Randall to join Oozma Kappa, but he finally became part of the cool guys at Roar Omega Roar and he warns Mike to not mess that up. Instead, Sulley joins Mike's team. Despite Mike's effort to find someone besides him, there is nobody else who would join his bunch of losers, so they are accepted into the games.
The Oozma Kappa house turns out be that of Squishy's mother. It looks nothing like the usual faternity houses. The monsters introduce themselves in the living room: Don, a mature student who was unlucky in his sales business and decided to return to school. Art, a flamboyant and laidback art major who gives Mike and Sulley a "dream journal". Terri and Terry Perry, who share one body, and Squishy, an "unwelcomed" little guy with many eyes. Mike and Sulley look at each other as the guys are estactic to have new brothers. Later that night, Mike and Sulley find out they will be sharing a very small room together. The other OKs turn the power off and host an initation in the basement, which is supposed to be spooky but is shortly interrupted by Squishy's mother, Sherry, who is doing laundry in the back room. The next day a letter from the Scare Games arrive, announcing the first challenge of the game: The Toxicity Challenge.
Each challenge of the Scare Games represents a part of the job of a Scarer. In the Toxicity Challenge, the players must simultanously race through a tunnel and avoid toxic stinging, glowing urchin-like balls that were produced by the Biology departement, just as a Scarer has to avoid "toxic" toys and clothes in a children's room. And because Scarers work in the night, the lights in the tunnel are turned off. Mike and Sulley immediately take their rivalry to the starting line. Roar Omega Roar comes in first, but although Mike and Sulley (still fighting with each other) come shortly after, the OK gets eliminated, because the whole team is required to cross the finish line. Mike is heartbroken and Dean Hardscrabble tells Mike it would've taken a miracle to keep them in the games. But at this moment, the JOX fraternity is found to have cheated by using toxicity repellent gel and is eliminated, miraculously allowing Oozma Kappa to stay in the games.
Oozma Kappa is joyfully celebrating that they somehow survived the first round. But Mike and Sulley aren't happy with each other at all. Mike tries to make the best out of the team he has, but Sulley is totally undiscerning and doesn't think that any of the Oozma Kappas is real Scarer material. Mike tries to gather the talents of his team mates, but outside of Terry and Terri's cheap magic tricks and Don's annoying suckers, he doesn't get much. So he decides to take full responsibility over the team and anyone else is just supposed to do exactly what he does.
The next challenge of the Scare Games starts. This time, the players have to sneak through the MU library, without getting caught by the librarian: a giant slug-like old woman with very good ears and a very scary appearance, who will attack and throw out anybody who does the smallest noise. The aim for every team is to snatch a flag with their symbol on it, like a Scarer has to reach their child without getting caught by their parents. Outside of thoughtlessly following Mike, sneaking and being silent, the OKs don't have a any plan, until Sulley, totally bored, starts a solo-run, followed by a mad Mike. They end up making a loud noise, but just as they are about to be caught by the librarian, the other OKs start to make noises to distract her. While all of them are finally kicked out of the library, Squishy was able to steal the flag, because he is very good at sneaking soundless. Something Mike totally overlooked. One team, EEK, is eliminated, and Oozma Kappa is announced to be one of the four remaining contestants.
In the night after the second round, Oozma Kappa is surprisingly invited to a party for the Top Scarers of the campus in the ROR's house. While the rest of his team is enjoying the party, Mike admires the Scare Games trophy and his reflection in it, fascinited by the fact that he is so close at getting everything he always dreamed about. Johnny Worthington III then holds a speech and greets his fellow contestants, but when he comes to the OKs, he just mocks them and Randall, again betraying his former friend Mike for the cool guys, activates a trap that douses them with colourful paint, confetti and flowers to make them look foolish. Prostrated, the OKs go home.
The next day, Mike and the OKs realize that the whole campus is overflown with pictures of their humiliation of the previous day. They confess to Mike, that they are thankful for everything he's done for them, but in the end they will stay the unscariest monsters for all their lives and they will never be able to become real Scarers. Mike then gets an idea. He persuades his fellows to follow him on a secret night field trip to the Monsters, Inc. - in which they break in. Through a window, Mike shows the OKs the Scare Floor where his dream of becoming a Scarer has started. He explains that all the Scarers are different like they are - some have too many heads like Terry and Terri, some are older than the rest like Don, but they all have learned to break through all obstacles to become real Scarers. That impresses even Sulley, and he and Mike are starting to warm up for each other, because they share the same dream and the same fascinations. But then, the OKs are detected by the security and can barely escape.
With fresh confidence awaken, the OKs are training hard for the next round. Mike and Sulley have learned to stand each other. While Mike is starting to see the real potential of his team, Sulley starts to accept his strategies. They recieve the letter for the next challenge of the Scare Games, where they have to haste through a maze and scare pictured children, but hide from from pictures of teenagers, who while similar to children and equally poisonous, cannot be scared. This time, the OKs master the challenge without any luck and with pure skills, and they finish in second place just after the RORs (PNK is eliminated in the event, as they scared everything that moved). They repeat their exploit at the next challenge of the Scare Games, where they have to hide in a house from security, in the same way a Scarer has to hide from children's parents (HSS is eliminated). The OKs and the RORs are the last two contestants for the big final. Dean Hardscrabble talks to Sulley and shows her respect for him, but notes that there is at least one monster in his team, that will not make the final Scare-Simulator Challenge of the Scare Games, because he's just not scary enough - meaning Mike. Sulley defends him, saying that Mike works harder than anyone else for that, but Hardscrabble points out that someone like Mike will never be able to scare a children.
In the night before the great finale, Sulley talks friendly to Mike and thanks him for all the work he has put into the team. He then decides to do something for him and gives him scare tutoring. He shows him his scare-techniques, but soon gives it up, after seeing what an amateur he is, without letting him know. Secretly, he's starting to agree with Hardscrabble about Mike's unscariness.
The Final Challenge of the Scare Games arrive. The champions Roar Omega Roar versus the underdog-surprise Oozma Kappa. The both contestants have to battle each other in the Scare-Simulator-Challenge, where one by one, every monster of each team has to enter their Scare-Simulator, read and interprete the mock child-information, choosing a scare-technique and then scare the dummy as much as they can, on the highest difficulty level. The team that reaches the most scream-energy wins the challenge and the Scare Games. Before the challenge starts, Mike discusses his strategy with his team. He wants to go in first, right before Don and Sulley should do last round. But Sulley wants to give Mike the honor of finishing the Scare Games for them, because he was one who started it. Mike is pleased and agrees to go in last, right after Sulley. Don makes the start and makes good use of his suckers. Surprisingly he scores a pretty high score and so are Terry and Terri that uses his appearance like a human body to scare in the act, Art that uses his flexibility to move around the room and even Squishy that uses his eyes to realize something similar like a zombie face, but their oppenents are also very good. In the second last round, Sulley from the OKs battles Randall from the RORs. Sulley has learned and studies the mick child-info, before he goes in. Then he chooses a different scare-technique than just his usual roar and even produces a small earth-quake. He score's very high, while his quake brought Randall in the other Scare-Simulator out of balance, so that his uncontrolled camouflage-ability mistakenly took the colour of the child room carpet - a very bright pink with tiny hearts on it. Because of his rather neat than scary looks, his score is rather low and when he comes out of the simulator, Randall gets mocked by his fellow RORs. Extremely angry, Randall swears that he'll one day take revenge on Sullivan for this humiliation - setting the stage for their upcoming rivalry in Monsters, Inc.
The last round of the final starts and Mike gets ready. He gets laughed at by the audience and the RORs when he enters the simulator. He knows exactly what he does and is ready to show the whole Monster University what Mike Wazowski can do. While he hides in front of the bed, the memories of all the scorn and derision he got over his life raced through Mike's head and he unleashed it all in one giant roar that makes the dummy scream as loud as it can and generates the highest score possible. Mike can't believe it, but the audience is amazed and jubilates for him. Against all expectations and to everybodies surprise, the Oozma Kappas won the Scare Games.
Joyfully Mike holds the Scare Game trophy for the OK's. All his dreams suddenly came true. Even Dean Hardscrabble congratulates them. Although not very pleased, she welcomes all the OKs back at the Scaring-Class like she promised. After the audience left, Mike still celebrates with his fellow OKs. When they are about to leave, too, Mike playfully gives the dummy a last little scare. But the dummy reacts enormously to this and gives him full points. At first Mike thought he might even be a better Scarer than he himself thought, but than he tried it again and again and every time the dummy screamed its head off and gave Mike the highest possible score. Curiously, Sulley started to look uncomfortable, when Mike just snatched with his finger in front of the dummy and its reaction was the same. Mike than became suspicious and checked the settings of the simulator. He found out that the difficulty-controller for the other scarings were on the highest level as they should be, but the last one - Mike's controller - was on the easiest. He came to the conclusion that someone messed around with it and therefor cheated. Mike got extremely mad and asked Sulley if he was responsible. Sulley admits the truth in front of his fellow team mates, saying that he wanted to cheat because he thought Mike would never be able to pass this challenge and they all would have lost. Heartbroken and angry, Mike shouts at Sulley that he thought they were friends and that he betrayed him. Now he doesn't even know if he's really worthy of the trophy and if he really would have won the Games for his team, but he swears to Sulley and to himself that he will find out.
On the next day, Sulley is welcomed back by the RORs, but he isn't interested anymore. Instead he's worried about Mike who has somehow vanished. When he sees Dean Hardscrabble he confesses to her that he has cheated in the Games. He takes full responsibility and therefore, Dean Hardscrabble calls him a shame for the whole Monster University and immediately expells him. At the same time, Mike waited in front of the Door Manufacturer Laboratories, after he has listened to a girl who has worked the whole semester on a door that is about to get shredded tomorrow, because it is too dangerous. Without knowing what that means, Mike skillfully steals the key card for the laboratory and breaks in. He activates the energy, opens the door and enters the Human World.
Mike sneaks out of the wardrobe and finds a little girl sleeping in a wooden bed. A real child - not a dummy. He gets nervous but he takes all his courage together. He must do that in order to prove himself! But his nervous roar only wakes the girl up. Sleepy the girl sees Mike and says: "Cute!". This wakes another girl up, who's sleeping in the same room. To his horror, Mike finds out that he isn't in a children's room. He is inside the girl's sleeping bungalow of a Summer Camp - filled with poisonous girls that find him and his scare-attempts funny and cute and badly want to touch him.
At the same time, in the Monster World, Sulley and Hardscrabble hear the alert and hurry into the Door Manufacturer Laboratories. Hardscrabble hears, that some monster went through the door and commands to cordon off the door until the Child Detection Agency is on scene. But Sulley knows that it was Mike who went through the door and he can not let his friend get stranded in the Human World. Against Hardscrabble cautions, Sulley enters the Human World. There he finds an empty bungalow - no sight of Mike. But through a window he can see the emergency lights of a police car and an amazed bunch of girls that described to the adults a green eyeball, that entered their room and fled into the forest. Sulley decides to follow Mike's traces and runs also into the forest, but not without getting glimpsed by the policemen. Mistaking him for a bear, they hunt Sulley into the forest, but he is able to shake them off. He then finds Mike sitting at the shore of a lake, hidden behind rowboats. Sulley sits down next to him and they start a sorrowful conversation. Mike explains that he wasn't able to scare those children. He is not able to scare anyone with his looks. And he is mad at Sulley, because Monsters like him have everything. Even when they totally mess things up, they are still beloved by anyone. But Sulley doesn't see it that way. He confesses to Mike that he is one giant failure. He always thought that he, as a Sullivan, should be scary without even trying, while Mike made everything right, right from the very first day on. He worked hard and got better and better, while he would still be at the very beginning without Mike. It was then, when they found something in each other that helped them look forward, before they got found by the policemen. Without losing time, the two of them hurried back into the bungalow and open the wardrobe, but find out, that the door must have been shut down. Without energy, they wouldn't be able, to return to the Monster World. The policeman come closer and Mike came up with an idea. Even without energy, the door must still be linked to this wardrobe. They need to produce an extrem amount of Scream-Energy. Then, maybe, they would be able to provide the door with enough energy, to activate it from their side. It's their only chance, but Sulley has his doubts. He may be good at scaring children, but these policemen are adults and adults usually can not be scared. But Mike encourages him, that together, they have come so far in the Scare Games, and together, they will come out of this mess, too. Sulley agrees and they start the show.
The policemen enter the bungalow and find it totally empty. Strange things are going on, weird sounds and shadows spook through the room, all produced by Mike and Sulley. When the horror is high enough, Sulley jumps out of the dark and roars as loud as he can, scaring all the adults out of their skins. Their screams aren't just powerful enough to activate the door, but, to the surprise of Dean Hardscrabble on the other side, let also all Scream Canister in the entire laboratorie explode. Without loosing time Mike and Sulley hurry back into the Monster World, only short before the door explodes also. Dean Hardscrabble, the master Scarer of all, is too shocked to say something to them.
After that, Sulley and Mike say goodbye to his fellow Oozma Kappas. Sulley feels sorry for them that they got expelled from Scaring once again thanks to him, but they don't take it that hard. They now know what they are capable of and thank Mike and Sulley for their chance. Mike and Sulley now agree to them, that it's okay just being okay. Then they say goodbye to each other. Mike takes the next bus back to Monstropolis - the same he took on his way to the campus for the first time. But before he can leave Monster University, Sulley stops the bus tand explains to Mike that they doesn't need to go seperate ways. He recalls all the things Mike has done at his time on the campus and that Sulley would have been totally lost without him. He doesn't what everyone else thinks, not even what Hardscrabble thinks. It was then, when Hardscrabble landed behind him and told Sulley to watch his mouth. But then she tells them both that, although she can not do anything about their expulsion, they both earned her respect and confessed that she might have been a little to rash at some of her students. Maybe even the drollest monster can become the scariest Scarer. She gives them her farewel, explains that all of the other Oozma Kappas are welcomed back at Scaring Class, and can not do any more but to wish them good luck in the future. She then takes off. Mike and Sulley don't know what to do now. For the first time, Mike has no plan for his life. But then they both have an idea how they still can work in the Monster's Inc. They do it the hard way - together - and start at the very bottom of the ladder: In the Post Office, where they meet the Abominable Snowman for the first time. He instructs them, that they should never peek into other monsters' letters, because the punishment for doing so is banishment. (Maybe a rule he should have taken more to his heart himself...)
Mike and Sulley are seen happy in the Post Office, shortly before the End Credits start to role. Meanwhile, pictures of Mike and Sulley's career ladder climb up are shown. They worked as janitors and kitchen assistants, until they entered the training program for Scarers, similar to the one seen in the beginning of "Monster's Inc.". In the After Credits' scene, Mike is seen without his cap, but instead with his Operator-helmet on his head at the Scare Floor, his new workplace. It's his and Sulley's first day. Their dreams finally came true - maybe not as they have imagined, but they are happy with what they have.
In the credits, a series of actualized Scare Cards of the Monsters that became Scarers after graduating are shown, featuring the Oozma Kappa members,Chet Alexander, Randall Boggs, Rosie Levin and Johnny Worthington. However, Johnny does not end up working for Monsters Inc., he goes to another company.
In a post-credits scene, the slug from the beginning of the movie finally arrives to his classroom; only to find out that the school year was over and that he missed every single class. He then slithers back home.
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