In Antarctica, three young penguin brothers – Skipper, Kowalski, and Rico – defy the laws of nature to save an egg the other penguins believe to be doomed. After saving it from a pack of leopard seals and accidentally setting themselves adrift on an iceberg, the egg hatches into Private.
Ten years later (after the events of the previous film), the penguins decide to leave the circus to celebrate Private’s birthday by breaking into Fort Knox in order to treat him to a discontinued snack called “Cheezy Dibbles” in the vending machine of their break room. Despite this, Private begins to feel out of place with the team, as he is described as being the “secretary/mascot”. Suddenly, they are abducted by the machine and sent to Venice, Italy by Dr. Octavius Brine, a renowned geneticist who removes his human disguise and reveals he is actually an octopus named Dave, who has grown resentful of penguins after he had been shunned from every zoo in the world because of cute penguins.
Rico swallows Dave’s collection of snowglobes along with a canister of a green substance called the Medusa Serum before the four escape and are chased through the canals and streets of Venice by Dave’s henchmen. When cornered, they are rescued by a group of animals from an Arctic elite undercover interspecies task force agency called “The North Wind” consisting of their leader, a gray wolf whose name is Classified, a harp seal demolitionist named Short Fuse, a polar bear named Corporal, and an intelligent snowy owl named Eva with whom Kowalski is instantly smitten. Their mission is to help animals who can’t help themselves.
At their hideout, their communication systems are hacked by Dave, who reveals that he has an enormous supply of the Medusa Serum and that he intends to capture the penguins out of every zoo he was kicked out of. Not wanting the penguins’ help, Classified darts the group and sends the group to their most remote base (which happens to be on Madagascar) but the penguins awaken mid-flight and crash land in the Sahara Desert before making their way to Shanghai, which they mistake for Dublin, Ireland. Discovering Dave’s next target in Shanghai using Dave’s snowglobe collection, the penguins ship themselves to their current location and make their way to the zoo. Disguising himself as a mermaid-tailed penguin (a tourist attraction) to distract Dave from his real target, Private himself is captured along with the Shanghai penguins after the North Wind arrives to put a stop to Dave’s plan. The penguins take the North Wind’s high-tech plane to give chase, but accidentally self-destruct the machine. They manage to track Private to an island though, using a device planted on him when Classified darted them before planting them in a flight to Madagascar. Meanwhile, on the island, Dave demonstrates his way to genetically mutate the penguins into hideous monsters as an effort to make humans disgusted by them as revenge.