The Foundation is the first part of a science fiction trilogy by the American writer Issac Asimov. It begins with the Psychohistorian, Hari Seldon predicting the Galactic Empire will crumble and people will suffer thousands of years of poverty. To help reduce the period of suffering, Seldon convinces the state to sponsor a scientific community on the planet Terminus. The scientific community grows into the Foundation, controlling peace through religion and the development of nuclear power.

The story begins with Gaal Dornick visiting the planet Trantor for the first time. He catches a taxi to his hotel, not realizing someone is following him. At the hotel Gaal buys tickets to the observation deck. On the deck, he meets Jerril and they talk about the wonders of Trantor. Gaal mentions he has come to work as a mathematician for Hari Seldon and the tone of the conversation changes. Jerril says Seldon has predicted disaster and Gaal should be careful of him. Gaal excuses himself and goes back up to his room. To his surprise, Seldon is sitting on his bed. Gaal questions Seldon on his prediction and Hari Seldon shows Gaal exactly how he came to predict the disaster.

Both men are arrested and put on trial. However, Seldon is quick witted enough to get the better of the prosecution and the next day they are brought in to see the Emperor. The Emperor tells Seldon he has a choice between death and exile. If Seldon decides to take the exile, the government will fund his project. Seldon takes the exile, but later Gaal discovers Seldon and his scientific community have been preparing for the exile for months.

Salvor Hardin visits Terminus leader Lewis Pirenne. He tells Pirenne Terminus is in danger from attack by Anacreon and they have no way to protect themselves. However, Pirenne sees little danger and tells Hardin that an envoy from Ancreon is coming in the next few days. When the envoy arrives, he tells the scientists Ancreon want to build a military base on Terminus. The Terminus leaders say no, but a few weeks later Ancreon offers an ultimatum. Terminus either allows them to build a base on the planet or they will attack. Pirenne thinks they have nothing to worry about because the empire will protect them. However, knowing the Empire is in no position to provide protection, Hardin arranges to overthrow the Terminus government.

Thirty years after his take over, Hardin now faces his own problems. The empire has divided into independent states, leaving Terminus open to attack from a variety of positions. The young politician Sermak visits Hardin and tells him they need to attack first and if he does not he will lead a revolt. The next day Poly Verisoff visits Hardin and tells him Anacreon has found an abandoned nuclear ship and they want the Foundation to restore it to its original glory. However, either way, he is afraid Anacreon will attack the Foundation. Hardin travels to Anacreon to attend a coronation. Upon arrival the leader of Anacreon, Weinis, tells him the nuclear ship is on its way to destroy the Foundation. Hardin says that is exactly what he thought Weinis would do and he has arranged for the Foundation priests to tell the people of Anacreon their leader is attacking the center of their religion and therefore committing sacrilege. At that the point, lights go out and an advisor runs into the chamber to tell Weinis people have surrounded the palace walls, asking for Hardin's release. To make matters worse, Weinis's son appears on the vidphone and under the instruction of a priest tells his father he is to be arrested.

The Foundation asks the trader Limar Ponyet to go to Askonce and free Foundation agent and fellow trader Eskel Gorov. Trading in Askonce is illegal and the Askonce government have put Gorov on death row. Ponyet meets Gorov in his cell. Gorov tells him the only way Ponyet can free him is by giving the Askonce leader gold. He continues to tell Ponyet he came to Askonce to introduce nuclear gadgets to the planet and therefore sowing the seed for religious control. Ponyets leaves Gorov and makes a transmuter that turns iron into gold. He takes it the nobleman Pherl and says it will help him to buy his way to power. Pherl accepts the device, but tells Ponyets he will pay for it after one week and if Ponyet does not agree he will have him killed. Unfortunately for Pherl, Ponyet records the conversation, implicating Pherl in the sale. From here he forces more nuclear gadgets on him, beginning Askonce's dependence on the Foundation.

Jorane Sutt persuades the Master Trader Horbor Mallow to go to Korell and check out their nuclear capacity. After insisting on choosing his own crew, including the politician Jaime Twer, he hovers over Korell, waiting for an invitation to the Commdor's palace. On the 7th day, the crew takes a priest aboard the ship. Immediately Korellian battleships approach, saying if they do not hand back the priest they will attack. Much to the crew's dismay, Mallow accepts the terms and moments later receives an invitation from the Commdor. At the Commdor's palace he gives the Commdor a demonstration of a nuclear belt that he says women will find so beautiful his popularity will soar. In return for a shipment of the belts, Mallow wants to see the Commdor's steel foundry.

Mallow's trading with Korrell raises Sutt's suspicions and he puts him on public trial. However, Mallow successfully proves to the court Sutt purposely lead Mallow into danger. With the people now behind him, Mallow buys himself into power and strives to become high priest and mayor.