This film rightfully deserved the Best Animated Feature Oscar that it got.

Rating: 9/10 (18 October 2017)

Lord Farquaad dumps a bunch of fairy-tale characters near Shrek's swamp, so he has to go to the land of Duloc, where he lives, to get his swamp back. Eventually this leads to him teaming up with Donkey to rescue a cursed Princess named Fiona that Farquaad wants to marry, and an attempt to foil the Lord's proposed marriage to her.
This film, which is the start of a 4-film franchise, is Dreamworks' first successful animated feature (the directors started out as a Technical Director on 1992's Toys, and as a background designer in 1981 on Kwicky Koala, Superfriends, and Trollkins, respectively).
Humor: The decidedly adult humour adds a wider audience appeal to this film, but might go over most children's heads.
Animation: The animation is extremely well-done for its time, nearly matching the quality of the VFX of The Lord of the Rings and AI. The mixture of photo-realistic humans and cartoonish fantasy characters was rather unique for the time, but is now commonplace.
Music: loses one point for including a very annoying Smashmouth song which led to the group losing its mind whenever their contribution to Shrek was mentioned on Twitter. The underscore is a lot better, though.
In other words, Shrek is one of the essential animated films to watch.