During a tense and uncomfortable family dinner, it unfolds that Frank, a gay professor and esteemed Marcel Proust scholar, attempted to take his own life after his romantic interest chose an academic rival over him. As the atmosphere shifts, Olive, a seven-year-old girl with glasses and a non-traditional look for a beauty pageant contestant, shares exciting news about the routine she’s preparing for an upcoming competition with the help of her grandfather. Despite not fitting the typical beauty pageant mold, Olive has a passion for performing and was thrilled to come in second at a regional event.
The family receives a voicemail from Olive's aunt, informing them that the winner of the beauty pageant Olive participated in had to withdraw, giving Olive a spot in the prestigious Little Miss Sunshine pageant in California. Overjoyed, Olive inspires her family—after some discussion about travel logistics and a motivational speech from her self-help enthusiast father, Richard—to embark on the journey together in their classic Volkswagen micro-bus.
During the drive, the family reveals personal secrets—Grandpa Edwin was expelled from his retirement facility for drug use, and Dwayne, Olive's brother, has committed to a vow of silence for nine months in hopes of joining the Air Force. All the while, he loses himself in the philosophy of Friedrich Nietzsche while trying to sidestep the bickering of his parents and Grandpa's lascivious advice. When the bus encounters mechanical trouble, the family must push-start the vehicle while navigating their growing frustrations, including Richard's disappointment over a failed book deal and Frank's embarrassment after bumping into his ex at a store.
Things take a turn when they stop for the night at a motel. In a heartfelt moment, Olive confides in Grandpa about her anxiety regarding the pageant, but he lovingly reassures her that she will shine. However, the tension between Richard and Sheryl escalates after his failed book deal, leading him to confront his partner in the middle of the night—only to have his ideas rejected once more.
The following day, Olive wakes her parents only to discover that Grandpa has passed away in his sleep. Rushed to the hospital, they receive the devastating news of his heroin overdose. Amid their grief, they face the daunting challenge of ensuring they arrive at Olive's pageant on schedule. In a desperate effort to honor his father, Richard makes the audacious decision to transport Grandpa's body in their van, en route to the pageant site, while their vehicle begins malfunctioning and honks incessantly.
After a series of chaotic events, which include evading a state trooper who is distracted by the unexpected discovery of Edwin's porn stash, the family perseveres. As they near their destination, Dwayne discovers he's colorblind, shattering his dream of becoming a test pilot and pushing him to confront his own frustrations and insecurities. However, with Olive's innocent support, he finds solace in their bond.
Finally, arriving at the pageant venue, there’s a whirlwind of confusion. Though they miss the sign-up time, Olive is graciously accepted to compete. While Richard grapples with a bittersweet farewell to his father, Dwayne and Frank navigate through their disdain for the unnatural child pageant environment, where Frank shares Proust's wisdom about suffering defining a person's character rather than mere happiness.
As the pageant kicks off, the over-the-top atmosphere triggers Richard's anxiety for Olive, prompting him and Dwayne to urge Sheryl to call it off. But Sheryl stands firm, advocating for Olive's right to express herself. When it's Olive’s turn on stage, she delivers a spectacular routine—a cheeky strip-burlesque dance dedicated to her beloved Grandpa, all the while utterly unaware of its risqué implications. As the crowd reacts in shock, Olive's family leaps to their feet, showing her their unwavering support.
Despite the initial chaos, the performance unites the family in celebration of Olive's individuality, leading to a cinematic finale as they break away from the rigidity of societal expectations. After a brief detour to the police precinct, where they face the consequences of Olive’s bold act, the family departs with a newfound closeness. They push-start their micro-bus once again and drive into the horizon, filled with fresh confidence, as they make their way back to Albuquerque.
