When Auguste Gusteau founded this restaurant, it was the first to merit a 5-star rating, along with a cookbook named "Anyone Can Cook" which became a best-seller. Later on however, the restaurant lost two of its five stars: one after feared food critic Anton Ego wrote a scathing review, and another when brokenhearted Gusteau died shortly thereafter--which according to tradition meant the loss of the second star. Gusteau's sous chef, Skinner, then inherited the restaurant and started a frozen food line using Gusteau's image, but he himself was not nearly as innovative as Gusteau. Thus, the restaurant sank into obscurity.
Two years later, Alfredo Linguini came to work their as a plongeur (garbage boy). On his first night, he ruined a soup that was cooking by accidentally spilling it and then repairing it with random ingredients. Remy was there that night and, noticing Linguini's actions, fixed the soup. The soup was served against all Skinner's protests and proved to be delicious when a food critic tasted it that night. After word got out about the soup, public interest in the restaurant was renewed. Linguini was made into a chef and after he became friends with Remy, the two worked together in secrecy to recreate the soup as well as some new recipes.
A few nights later, the customers request to see another new recipe from the chef, so Skinner, out of jealousy of Linguini's success, tricks him into creating a Gusteau recipe named "Sweetbread a la Gusteau", without mentioning that Gusteau himself hated the dish. With Remy's help, Linguini revives the dish and the customers love it, so everybody in the restaurant orders it. With this success, the restaurant's popularity soars.
Skinner later discovers that Linguini is the son of Gusteau, as he was the son of Gusteau's deceased girlfriend, Renata Linguini. He tries to conceal this information to prevent Linguini from stealing his ownership of the restaurant. After Remy discovers this fact, he tells Linguini who then assumes ownership of the restaurant. Skinner is fired, the frozen food line is discontinued, and the restaurant thrives once again under Linguini's leadership.
When Ego learns of the restaurant's success, he informs Linguini personally that he will return to sample his recipes, making Linguini and the whole staff nervous. Skinner attempts to sabotage Linguini's efforts by capturing Remy, who he discovers is the real chef. The kitchen falls into chaos as Linguini has no idea how Remy cooked his dishes. Remy escapes and rushes to help Linguini, only to see the entire staff depart when Linguini introduces Remy to them. Fortunately, Remy's colony of rats arrive to help him serve the customers, as does Colette, Linguini's girlfriend and the kitchen's only female cook. Together, the team cooks up a dish of ratatouille, which, despite being a "peasant dish", turns out to be delicious thanks to Remy. Ego loves it as well (to the point that it invokes childhood memories of his mother's cooking) and asks to meet the chef. After the customers leave, Remy and Ego finally meet, and Ego's negative perception of the restaurant changes drastically. He praises its chef as the finest in France, and gives the restaurant an astonishingly positive review.
Sadly, Skinner discovers the rat infestation and "rats them out" to the health department resulting in the restaurant being closed. While what became of the building that once housed the restaurant is unknown, Linguini, Remy, and Colette all move on to start a new bistro, "La Ratatouille", funded by Ego (who also lost his job and credibility as a food critic for praising a rat-infested restaurant) himself. It has proven to be almost as popular as Gusteau's.