Austin Powers, played by Mike Myers, is enjoying a romantic moment with Vanessa, only to discover that she is actually a Fembot sent by the infamous Dr. Evil, which leads to her self-destruction. Meanwhile, in a NATO monitoring facility, it's 1999, and Dr. Evil, who has been frozen for three decades, is reawakened. At his Seattle headquarters, he is introduced to Mini-Me, a 1/8 clone of himself, and learns about the substantial profits generated from a legitimate investment in a startup named "Starbucks." However, Dr. Evil is unimpressed and reveals his audacious plan: to construct a time machine that will allow him to travel back to the 1960s and steal Austin's Mojo.
Dr. Evil and Mini-Me journey back to 1969, where they encounter a younger #2, played by Rob Lowe, and Frau Farbissina, portrayed by Mindy Sterling. To carry out their scheme, they recruit the disgruntled Scottish guard, Fat Bastard, again played by Mike Myers, to extract Austin's Mojo from his frozen body housed in the Ministry of Defense’s Cryogenic Chamber. As Fat Bastard successfully pilfers the Mojo in the past, Austin, unaware of the theft, discovers its absence during a steamy encounter with the Russian agent, Ivana Humpalot.
Realizing the gravity of the situation, the Ministry of Defense sends Austin back to 1969, where he teams up with CIA agent Felicity Shagwell, portrayed by Heather Graham. Together, they narrowly escape yet another assassination attempt by Dr. Evil’s henchmen, including Mustafa, played by Will Ferrell. Following a frantic chase, Mustafa divulges the location of a secret volcanic lair. After identifying Fat Bastard as the culprit behind the Mojo theft, Felicity attempts seduction, but Austin finds himself unable to perform due to his missing Mojo.
In a twist, Dr. Evil consumes Austin's Mojo, leading to a scandalous encounter that results in an unexpected pregnancy with Fran, potentially hinting that Scott, Dr. Evil’s son, is the offspring. As Dr. Evil plots to hold the world ransom with a laser positioned on the moon, Felicity lures Fat Bastard into a trap, securing a crucial stool sample that points them to the Caribbean.
Upon arriving in the Caribbean, Austin and Felicity are captured by Dr. Evil. However, Felicity cleverly frees them by distracting the guards, causing them to fall into the lava of the volcano. As Dr. Evil makes preparations to install the laser on the moon, Austin and Felicity hijack an Apollo 11 spacecraft to counteract the situation. A spectacular confrontation ensues between Austin and Mini-Me, culminating in Mini-Me being ejected into space.
When Austin finally faces Dr. Evil, the giant laser is activated, threatening Washington D.C. However, in a heroic moment, Austin diverts the laser just in time, albeit at the cost of Felicity’s life due to poison gas. Using Dr. Evil’s time portal, Austin travels back ten minutes and meets his past self, enabling him to save both Felicity and the world simultaneously.
As chaos unfolds in Dr. Evil's moon base, he triggers the self-destruction sequence and attempts an escape after carelessly tossing Austin's Mojo bottle into the air; it shatters, but Felicity reassures Austin that his Mojo was never lost. Together, they use the portal to return to 1999. In a final showdown, Fat Bastard attempts one last assault on Austin, only to be thwarted when Felicity delivers a powerful kick to his crotch. In the end, Dr. Evil retrieves Mini-Me from space, vowing once again to conquer Austin Powers.
As the movie concludes, a comical twist sees two separate Austins appear in 1999, with Austin #1 discovering Felicity sharing a bed with Austin #2, setting the stage for further mischief and mayhem.
