In Antarctica, a trio of young penguins named Skipper, Kowalski and Rico are stranded on an iceberg and set adrift while rescuing an egg. The egg hatches into their youngest member, Private. Ten years later, the penguins, now at the circus, decide to leave to celebrate Private's 10th birthday. However, Private feels out of place in the team.
The penguins are abducted by Doctor Octavius Brine, in reality an octopus named Dave, and taken to Venice, Italy. Dave has grown jealous of penguins, who are indirectly responsible for him being shunned out of every major zoo in the world. Rico devours Dave's snowglobe collection and a substance called the Medusa Serum before the penguins escape. The team are resuced by a spy agency called "North Wind", consisting of their leader, a gray wolf named Classified, a harp seal named Short Fuse, a polar bear named Corporal, and a snowy owl named Eva. North Wind takes the penguins to their hideout, where their communications systems are hacked by Dave, who reveals he has a massive supply of the Medusa Serum, and he intends to abduct every penguin from every zoo he was kicked out of.
Classified sends the penguins on a flight to Madagascar, but the penguins crash-land in the Sahara Desert. They arrive in Shanghai, where Private is captured by Dave, along with the Shanghai penguins. The pengins use North Wind's high-tech plane to pursue them, but accidentally self-destruct it. However, they manage to track Private to an island using a device planted on him. Meanwhile, Dave reveals his plan to mutate penguins into hideous monsters so humanity will be disgusted by them.
North Wind and the penguins are captured after a failed attempt at a frontal assault. Dave seemingly disintegrates Private, but he manages to escape. Private rescues North Wind and goes back to stop Dave, who has begun turning the penguins of New York into monsters. The penguins decide to connect Private to the machine to revert the mutated penguins back to normal. Dave jumps into the path of the machine and is transformed into a baby version of himself, while the penguins attach his snowglobes to the machine and successfully revert the mutated penguins back to normal. However, Private is mutated as a result, though the team gains a newfound respect for him.
Dave is stuck in a snowglobe and admired by a young girl. Classified, gaining a newfound respect for the penguins, promises to give them anything they desire. The penguins are given jetpacks and fly off into the sky. Later on, the penguins return to the circus and restore Private to normal by plugging Mort into the ray. Mort initially shows no side-effects until he swallows King Julian whole.
- Tom McGrath as Skipper.
- Chris Miller as Kowalski.
- Christopher Knights as Private.
- Conrad Vernon as Rico.
- John Malkovich as Dave.
- Benedict Cumberbatch as Classified.
- Ken Jeong as Short Fuse.
- Annet Mahendru as Eva.
- Peter Stormare as Corporal.
- Andy Richter as Mort.
- Danny Jacobs as King Julien.