Evan (FREDDIE HIGHMORE) is an 11-year-old boy growing up in an orphanage who can hear music in just about anything. While Richard Jeffries (TERRENCE HOWARD) of New York's Child Services would like to see him placed with a family, he understands Evan's reluctance since many kids worry that if they leave, their birth parents won't be able to find them.
11 years ago, his were pampered cellist Lyla Novacek (KERI RUSSELL) and Irish rocker Louis Connelly (JONATHAN RHYS MEYERS) who met one night in New York, with their liaison resulting in her getting pregnant. When her father, Thomas (WILLIAM SADLER), separated them, they figured they'd never see each other again. That only got worse for Lyla when her father lied that her baby died in childbirth, thus resulting in young Evan ending up at his orphanage, Lyla in Chicago teaching music, and Louis in San Francisco in an office job.
Back in the present and believing that music will someone lead him to his parents, Evan ends up in New York City where he meets young street performer Arthur (LEON G. THOMAS III). With no place to stay, Evan returns with Arthur to the latter's deserted theater home where he and other homeless kids ply the streets for tips that go back to the stern man caring for them, Wizard (ROBIN WILLIAMS).
When he realizes Evan is a guitar prodigy, he renames him "August Rush," sends him out into the city, and dreams of making big money being the boy's manager. But August will not be denied in his quest, resulting in him meeting church girl Hope (JAMIA SIMONE NASH), whose pastor gets the boy into Juilliard. From that point on, and as he continues to discover and make music, August hopes that he'll some day meet his parents, unaware that they're now also in the city with him.