In 2002, within a hidden lair behind the iconic Hollywood sign, Dr. Evil unveils his latest diabolical scheme to his minions. His plan? To travel back to 1975 and resurrect Johan Van Der Smut, known as Goldmember, who created a cold fusion unit for a tractor beam, which Dr. Evil whimsically names Preparation H—definitely not to be mixed up with its similarly named counterpart. The villain aims to harness this tractor beam to pull a meteor towards Earth, targeting the polar ice caps to trigger catastrophic global flooding.
Just moments after revealing his wicked plot, Austin Powers and the British Secret Service storm in, capturing Dr. Evil. As a reward for his bravery, Austin is knighted but is left disheartened when his renowned super-spy father, Nigel Powers, does not attend the ceremony. At a celebration party, Austin sings with the band Ming Tea and meets two Japanese twins, Fook Mi and Fook Yu, and just as he is about to engage in some extravagant fun, Basil Exposition reveals grim news—his father has been kidnapped, leaving behind the peculiar clue that the crew members of his yacht have had their genitalia painted gold.
Determined to find answers, Austin visits the imprisoned Dr. Evil, who discloses that Goldmember is the mastermind behind the abduction. Journeying to 1975, Austin infiltrates Goldmember's roller disco club, Studio 69, where he reunites with Foxxy Cleopatra, an undercover FBI agent played by Beyoncé Knowles, who is disguised as a disco singer. Together, they attempt to rescue his father, but their efforts are thwarted as Goldmember drags Nigel through Dr. Evil's time machine back to 2002, leaving a henchman clad in gold to eliminate Austin.
With the help of Foxxy, Austin evades capture and decides to take her to the future in their mission to save his father and avenge Goldmember for the betrayal. Meanwhile, in the present day, chaos ensues as Dr. Evil and Mini-Me incite a prison riot during their escape. A British Intelligence mole known as Number 3 (portrayed by Fred Savage), whose appearance features a conspicuous mole, informs Austin that Dr. Evil has relocated to a new lair—a gigantic submarine styled after Dr. Evil himself.
Austin and Foxxy embark on a journey to Tokyo, where they confront Fat Bastard, now an oversized sumo wrestler. After an amusing duel, Foxxy manages to apprehend Fat Bastard, who reveals that a Japanese businessman, Mr. Roboto, is collaborating with Dr. Evil and Goldmember. Unconvinced by Roboto's claims of ignorance regarding Nigel's whereabouts, Austin and Foxxy infiltrate the factory where Goldmember's car is being loaded with the command unit for the tractor beam. As Foxxy struggles against Goldmember, Austin makes a valiant effort to rescue his father, yet Goldmember manages to escape with the command unit, fleeing back to Dr. Evil's submarine.
Conflict erupts between Nigel and Austin as they clash over their strategy to tackle the dire situation. Concurrently, Dr. Evil's son, Scott Evil, becomes more villainous in a desperate bid to win his father's approval, even adopting his baldness. Scott presents a daring scheme involving sharks armed with laser beams, fulfilling a long-standing fantasy from the previous film. In a twist of allegiance, the rejected Mini-Me chooses to join forces with Austin.
In a daring move, Austin, Foxxy, and Mini-Me infiltrate the submarine, but Austin falls prey to capture. As Dr. Evil prepares to unleash the tractor beam, Foxxy cunningly steals the key, setting Austin free. Just as he gears up to confront Dr. Evil, Nigel appears, dropping a shocking revelation: Austin and Dr. Evil are brothers, separated in their infancy after an assassination attempt claimed their mother. Following a heartfelt reunion, as they embrace, Goldmember seizes control of the tractor beam, humorously revealing his gold-plated genitals as a functional spare key.
Together, Austin and Dr. Evil strategize to reverse the tractor beam's polarity, thwarting the meteor’s impact and rescuing the planet. They apprehend Goldmember, who whimsically breaks the fourth wall, indicating that their adventure has been transformed into a film by Steven Spielberg, starring Tom Cruise as Austin, Kevin Spacey as Dr. Evil, Danny DeVito as Mini-Me, and John Travolta as Goldmember. In a delightful conclusion, the heroes gather in a Hollywood theater to watch the film. As they exit, they unexpectedly encounter Fat Bastard, who has now slimmed down thanks to a new diet. As Austin and Foxxy share a kiss, back in Dr. Evil's lair, Scott—now bald and mimicking his father's demeanor—vows to exact revenge on Austin, dancing with flair reminiscent of Michael Jackson.
