Dominick Cobb (Leonardo DiCaprio) and business partner Arthur (Joseph Gordon-Levitt) perform corporate espionage using an experimental military technology to infiltrate the subconscious of their targets and extract information while experiencing shared dreaming. Their latest target is Japanese businessman Saito (Ken Watanabe). Tiered "dream within a dream" strategies are used and dreamers awaken by a "kick" such as dying in the dream or falling. If the dreamer is the one who awakens, the dream "collapses". Each "extractor" carries a totem, a small object whose behavior only its owner can predict, used to determine whether a dreamer is in someone else's dream. Cobb's totem is implied to be a spinning top that spins perpetually in the dream state. The extraction from Saito fails when sabotaged by a memory of Cobb's deceased wife Mal (Marion Cotillard). Saito reveals, after Cobb's and Arthur's associate sells them out, that he was actually auditioning the team to perform the difficult act of "inception": planting an idea in a person's subconscious.
Saito wishes to break up the energy conglomerate of his ailing competitor Maurice Fischer (Pete Postlethwaite) by planting the idea in his son and heir Robert Fischer (Cillian Murphy) to disintegrate his father's company. Should Cobb succeed, Saito would use his influence to clear a murder charge against Cobb, so he can return to the United States and his children. Cobb accepts the offer and assembles his team: Eames (Tom Hardy), a conman and identity forger; Yusuf (Dileep Rao), a chemist who concocts the powerful sedative for a stable "dream within a dream" strategy; Ariadne (Ellen Page), an architecture student tasked with designing the labyrinth of the dream landscapes; and Arthur. Saito accompanies so he can verify the team's success.
When the elder Fischer dies in Sydney and his body is flown back to Los Angeles, the team share the flight with Robert Fischer. Cobb sedates him, bringing him into a shared dream with the extractors. At each level in the layered dreaming, the person generating the dream stays behind to set up a "kick" that will be used to awaken the other, sleeping team members who have entered another dream layer deeper. In the first level, Yusuf's rainy downtown dream, the team abducts Fischer; however, Fischer's trained subconscious projections attack, wounding Saito severely. Eames temporarily takes the appearance of Fischer's godfather, Peter Browning (Tom Berenger), to suggest Fischer reconsider his father's will. Yusuf drives the team in a van as they are sedated into the second level, a hotel dreamed by Arthur. Here, the extractors recruit Fischer, convincing him that his kidnapping was orchestrated by Browning and that they are Fischer's subconscious defence. In the third level, a snowy mountain fortress dreamed by Eames, Fischer is told they are in Browning's subconscious, but they are really going deeper into Fischer's. Yusuf, under assault in the first level, initiates his kick too soon by driving off a bridge, removing the gravity of Arthur's dream world and causing an avalanche in Eames' dream, a kick which all missed. Arthur improvises a new kick using an elevator that will be synchronized with the van hitting the water, while the team in Eames' dream races to finish the job before the new round of kicks.
Due to the effects of heavy sedation and multi-layered dreaming, death during this mission will result in entering Limbo, dream space of unknown content where the dreamer could be trapped. Elapsed time in each dream level is roughly 20 times greater than in the level above it; in Limbo, the deepest level of all, the planned ten hours of outer-world time would be experienced as almost two centuries. Cobb reveals to Ariadne that he spent "50 years" with Mal in Limbo constructing a world from their shared memories while seemingly growing old together. Returning to the waking world, they found less than three hours had passed, but Mal, convinced she was still dreaming, committed suicide, all the while trying to persuade Cobb to do so by incriminating him in her death. He fled the U.S. and left his children behind, ostensibly in the care of his father-in-law, Prof. Stephen Miles (Michael Caine).
Saito succumbs to his wounds, and Cobb's projection of Mal sabotages the plan by killing Fischer, sending them both into Limbo. Cobb and Ariadne enter Limbo to find Fischer and Saito, while Eames remains on his dream level to set up a kick by rigging the fortress with explosives. Cobb confronts his projection of Mal, who tries convincing him to stay in Limbo. Cobb refuses and confesses guilt for Mal's suicide: using inception to plant the idea in her mind that the world they had been living in for 50 years was not real, Cobb had convinced her to leave Limbo with him through suicide, but once back in the real world, she was unable to discern dreaming from reality. Mal attacks Cobb but Ariadne shoots her. Through his confession, Cobb attains catharsis and chooses to remain in Limbo to search for Saito. Ariadne pushes Fischer off a balcony, resuscitating him at the mountain fortress, where he enters a safe room to discover and accept the planted idea: that his father wishes him to be his "own man", and that splitting up the conglomerate might not be a radical notion.
All team members other than Cobb and Saito ride the synchronized kicks back to reality: Ariadne jumps off a balcony in Limbo, Eames detonates the explosives in the fortress, Arthur blasts an elevator containing the team's sleeping bodies up an elevator shaft, and the van in Yusuf's dream hits the water. Cobb eventually finds an aged Saito in Limbo and the two remember their arrangement, presumably shooting themselves and awakening to outer-world reality on the airplane. Saito honors the arrangement and Cobb passes through U.S. customs once the plane lands in Los Angeles. Before reuniting with his children, Cobb tests reality with his spinning top, but he turns away to greet them before observing the results.
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