Dogs and cats lead a double life, displaying remarkable intelligence, the ability to speak, and even manage their own espionage organizations to keep the world safe. In Germany, a bloodhound named Rex uncovers a Cocker Spaniel puppy who is in the act of stealing highly confidential secret codes. Upon closer inspection, the puppy reveals herself to be Kitty Galore, a hairless Sphynx cat in disguise. After making her escape, Rex promptly alerts the agency to her presence.
In San Francisco, chaos unfolds at a used car dealership where a mascot named Crazy Carlito (who is dressed like Uncle Sam) concocts a plan to level the building with explosives. Just in time, police officer Shane Larson and his loyal canine partner Diggs arrive. However, Diggs, in a reckless attempt to help, retrieves the detonator from Carlito’s grip but ends up biting it, triggering an explosion that demolishes the dealership. The incident is observed by Butch and Lou, who have now grown up, with Lou having become the head of D.O.G. HQ. Lou sees potential in Diggs and wants to recruit him as an agent, to which Butch agrees only reluctantly.
Following the incident, Diggs finds himself confined in police kennels to avoid further mishaps. This is where Butch comes to his rescue and takes him to D.O.G. HQ. With the mission to track an informant pigeon named Seamus, Diggs and Butch cross paths with Catherine, a keen agent from M.E.O.W.S. (Mousers Enforcing Our World's Safety), who is also on the trail for Seamus. Catherine shares critical details about Kitty Galore: previously an esteemed M.E.O.W.S. agent known as Ivana Clawyu, she faced humiliation from her peers after a disastrous incident involving hair removal cream while on a mission. Cast out by her fellow agents due to her altered appearance, Kitty swore vengeance against not only cats and dogs but also their human companions.
In a twist of fate, Lou seeks to ally with Tab Lazenby, the head of M.E.O.W.S., to bring Kitty to justice. Their investigation leads them to the residence of a cat lady, where they discover that Calico, once a loyal aide to Mr. Tinkles, has been supplying stolen technology to Kitty via carrier pigeons. In a frantic confrontation, Diggs goes after Calico, narrowly escaping a demise in a wave of cat litter. Attempting to interrogate Calico yields little success, as he claims ignorance regarding Kitty’s hideout but does reveal information about his prior master.
Determined, the group heads toward Alcatraz, where the notorious Mr. Tinkles is kept, his mental state having deteriorated from captivity. While he refuses to cooperate directly with the team, he leaves them with one intriguing tidbit: “A cat's eye reveals everything.”
As news spreads that dogs and cats have united against her, Kitty retaliates by hiring mercenaries Angus and Duncan MacDougall to eliminate Seamus during his return from Alcatraz. Diggs unexpectedly throws Angus overboard during a struggle, leading Butch to grow frustrated with Diggs’ incompetence, resulting in his dismissal from the team.
Catherine takes Diggs home, where he meets her nieces who treat him kindly, demonstrating that they haven’t yet learned the age-old rivalry between dogs and cats. Diggs shares his past struggles with trust and the impact of being confined to kennels, prompting Catherine to advise him that with his current mindset, assistance will always elude him.
Realizing he needs to change, Diggs decides to accompany Catherine back to M.E.O.W.S. HQ. There, they decipher Mr. Tinkles' clue that points to Kitty’s hideout at the fairground along with her new owner, the amateur magician Chuck the Magnificent.
At the fair, Kitty and her assistant Paws capture Diggs and Catherine. Kitty unveils her sinister plan to transmit the "Call of the Wild", a signal that would incite hostility in dogs toward humans, hoping that they would be abandoned in kennels. Kitty aims to use the fair's giant swinging ride as a satellite dish to transmit this signal into orbit.
Just when it seems all is lost, Diggs and Catherine manage to escape following an emotional confession between them. They reunite with Butch and Seamus to thwart Kitty’s scheme. In a chaotic turn of events, Seamus accidentally activates Kitty's device, causing a worldwide frenzy among dogs. A showdown ensues as Paws is revealed to be a robot, and Diggs cleverly tricks him into destroying the transmission wires. In a final act of rebellion, Kitty's pet mouse Scrumptious turns against her, launching Kitty into a cotton candy storm that lands her squarely in Chuck’s hat.
With the mission successfully accomplished, Diggs is happily adopted by Shane, but upon returning to HQ, he learns that Mr. Tinkles has mysteriously escaped from prison, hinting at more adventures to come.
