Mickey Mouse pilots a river steamboat, suggesting that he himself is the captain. He cheerfully whistles "Steamboat Bill" and sounds the boat's three whistles. Soon the real captain appears (Pete) and angrily orders Mickey off the bridge. Mickey blows a raspberry at Pete, and then Pete attempts to kick him but Mickey rushes away in time and Pete kicks himself in the rear accidentally. Mickey rushes down the stairs, slips on a bar of soap on the boat's deck and lands in a bucket of water. A parrot makes fun of him, and Mickey throws the bucket over the bird.
Pete, who has been watching the whole thing, pilots the steamboat himself. He bites off some chewing tobacco and spits into the wind. The spit flies backward and rings the boat's bell. Amused by this Pete spits again, but it hits him in the face, making him fuss.
The steamboat makes a stop at "Podunk Landing" to pick up a cargo of various livestock. Just as they set off again, Minnie Mouse appears, running to catch the boat before it leaves. Mickey does not see her in time, but she runs after the boat along the shore and Mickey takes her on board using the cargo crane.
Landing on deck, Minnie accidentally drops a guitar and some sheet music for the song "Turkey in the Straw" which are eaten by a goat. The two mice use the goat's body as a phonograph which they play by turning the animal's tail like a crank. Mickey uses various objects on the boat as percussion accompaniment and "plays" the animals like musical instruments. This ends with them using a cow's teeth to play the song as a xylophone.
Finally an angry Captain Pete appears and puts Mickey to work peeling potatoes. In the potato bin, the same parrot from before appears in the port hole and mocks Mickey again. The mouse throws a partially peeled potato at him, knocking him into the river below. The film ends with Mickey laughing at the sound of the bird struggling in the water.
Some scenes of what might be considered gratuitous animal violence have been cut including Mickey playing a nursing sow's nipples like an accordion keyboard, pulling a cat's tail and swinging it around his head, and using a goose as a bagpipe. Some of these cuts have since been reinstated.
Under United States copyright law, Steamboat Willie, along with other works created in 1928, entered the public domain on January 1, 2024.