Shrek and Fiona return from their honeymoon to find they have been invited by Fiona’s parents to a royal ball to celebrate their marriage. Shrek refuses to go at first, but Fiona talks him into it, and along with Donkey, they travel to the kingdom of Far Far Away. They meet Fiona’s parents, King Harold and Queen Lillian, who are shocked to see their daughter as an ogre, with Harold particularly repulsed. At dinner, Shrek and Harold get into a heated argument over how Shrek and Fiona will raise their family, and Fiona, disgusted at Shrek and Harold’s behavior, locks herself away in her room that evening. Shrek worries that he has lost his true love, particularly after finding her childhood diary and reading that she was once infatuated with Prince Charming.
Harold is reprimanded by the Fairy Godmother and Charming, her son, by reminding Harold that Charming was to marry Fiona in exchange for his own happy ending, and requests that he finds a way of getting rid of Shrek. Harold arranges for Shrek and Donkey to join him on a fictitious hunting trip, which actually is a trap to lure them into the hands of an assassin, Puss in Boots. However, Puss is unable to defeat Shrek and, revealing that he was paid by Harold, requests to come along and make amends. The three sneak into the Fairy Godmother’s potion factory and steal a “Happily Ever After” potion that Shrek thinks will restore Fiona’s love for him.