Attorney Mitch Martin, portrayed by Luke Wilson, returns unexpectedly from a business trip only to discover that his girlfriend, Heidi (played by Juliette Lewis), is involved in a series of orgies with various partners. Although she insists that it is purely a physical connection, Mitch realizes that the relationship is no longer viable for him. At his friend Frank's (the role of Will Ferrell) wedding party, Mitch crosses paths with his high school crush, Nicole (Ellen Pompeo). In a drunken state, he makes a poor impression, clumsily spilling hot coffee on her dress while trying to help clean the mess.
After breaking up with Heidi, Mitch dives into house-hunting. Meanwhile, his other friend Bernard (played by Vince Vaughn), the owner of the electronic store chain "Speaker City," throws a lavish party at Mitch's home. Hiring Snoop Dogg to perform, this event, dubbed "Mitch-A-Palooza," skyrockets Mitch and his friends into the upper echelons of the college social scene, leading them to revert to their carefree, frat-boy roots. Frank, once known as "Frank the Tank" for his hard-partying ways, struggles to maintain the perception of maturity before his wife, but ultimately succumbs to temptation by drunkenly streaking through the neighborhood, which strains their marriage.
The day after the party, Mitch wakes up next to Darcie (Elisha Cuthbert), initially worried but relieved when she clarifies they just had a casual encounter. All three friends eventually come face to face with Dean Pritchard (Jeremy Piven), a childhood rival who’s seeking revenge for the pranks they pulled on him. Pritchard informs them that Mitch's house is designated for social services, forcing them to either vacate or comply with his terms to keep it. In a moment of desperation, Bernard proposes that they start an inclusive fraternity, a suggestion that Mitch reluctantly accepts, adopting the title of "The Godfather."
Despite his efforts to balance his work and burgeoning fraternity life, Mitch finds it increasingly difficult as people he knows at work express interest in joining. During a meeting at work, he's caught off guard when he learns that Darcie is actually the daughter of his boss, Mr. Goldberg, which complicates matters further when rumors about their night together circulate.
Tragedy strikes when Blue, an elderly fraternity member, dies during his birthday celebration after an encounter with two topless women. Following this, Frank's wife decides to divorce him, leaving him devastated and temporarily residing with Mitch. When Mitch invites Nicole and her daughter to a birthday celebration, she arrives with a date, Mark (Craig Kilborn). This leads to awkward moments, including Mitch catching Mark behaving inappropriately. To protect himself, Mark lies to Nicole, claiming he caught Mitch in a compromising situation, which further alienates Mitch from her as suspicion grows.
Dean Pritchard continues to be a thorn in their side, eventually shutting down the fraternity house and threatening expulsion for those involved. However, Mitch learns that the group can regain their status by completing various academic and athletic challenges. Despite successfully passing all but one, they find themselves upended when Blue’s death causes their grades to plummet.
After a fierce confrontation, Frank retrieves a recording of the Dean bribing the student council president, Megan Huang, to rescind the fraternity’s charter. With the Dean's credibility shattered, he is fired, and the fraternity's status is reinstated. In a twist of fate, Nicole seeks to reconcile with Mitch after discovering Mark has been unfaithful. Their relationship hints at rekindling, while Bernard and Mitch opt to step back from the fraternity, leaving Frank to continue its legacy.
As the film concludes, a comical incident occurs when Mark drives his car off a bridge, landing on Dean Pritchard, resulting in an explosive end for both. Meanwhile, Blue can be seen cheerfully playing the piano in heaven, singing "Dust in the Wind," and Frank dedicates a song to Mitch at a radio station, thanking him for his friendship. Ultimately, life moves on as Bernard takes on a new role coaching his son's soccer team, setting the stage for new beginnings and adventures.
