Pee-wee Herman's most treasured possession, a fabulously accessorized bicycle, becomes the target of envy for his adversary, Francis Buxton. At the same time, Pee-wee remains blissfully unaware of the affection shown by Dottie, a bike shop employee, who is hopelessly infatuated with him. Chaos ensues after Pee-wee's beloved bike is stolen, leading him to report the theft to the authorities, albeit in vain. Convinced that Francis is the mastermind behind the crime, Pee-wee confronts his neighbor, only to be pacified by Francis' father, who assures him of his son’s innocence. In a misguided move, Pee-wee offers a generous reward of $10,000 to whoever can return his bike, inadvertently playing directly into Francis's hands, as he orchestrated the theft himself.
As Pee-wee's determination to recover his bike intensifies, he seeks help from various friends and neighbors, yet his obstinacy prevents him from accepting assistance. Eventually, he consults a dubious psychic, who claims that his bicycle is hidden in the depths of the Alamo Mission in San Antonio. This revelation propels Pee-wee on a cross-country adventure, hitching rides with a runaway convict named Mickey, alongside the spectral Large Marge.
During his journey, Pee-wee encounters Simone, a waitress with dreams of visiting Paris. As they share a heartfelt moment while watching the sunrise from the inside of a giant roadside dinosaur statue, Pee-wee encourages her to chase after her dreams, only to realize that her boyfriend, Andy, disapproves of her aspirations. After Andy attempts to threaten Pee-wee, our hero dives onto a moving train, firmly committing to his quest for his lost treasure.
Upon arriving at the Alamo, Pee-wee is disheartened to find out that the historic site has no basement. Nevertheless, he persists in his search and eventually reunites with Simone at a bus station. During their encounter, she expresses her desire to break free from Andy's grip and travel to Paris, urging Pee-wee to continue his bike hunt.
Pee-wee's heartfelt apology to Dottie signifies a shift in his self-awareness, but his moment of reflection is abruptly interrupted by Andy's relentless pursuit. To escape, Pee-wee dons a disguise and takes part in a rodeo, narrowly avoiding a potential world record in his comedic style before being knocked unconscious. Following a stop at a biker bar, where he inadvertently riles up a bunch of tough bikers, Pee-wee impresses them by dancing to "Tequila" in his towering platform shoes. As a reward for his unexpected dance skills, they gift him a motorcycle, which he promptly crashes.
Upon regaining consciousness in a hospital, Pee-wee is stunned to see his prized bike featured in a Hollywood movie. This piques his adventurous spirit, inspiring him to devise a plan with the legendary comedian Milton Berle to infiltrate Warner Bros. Studios in Burbank. Under the cover of night, the duo sneaks onto the studio lot, navigating through active film sets and evading security in search of Pee-wee's bike.
Their escapade leads to an unexpected crisis when they discover a burning pet shop. Without hesitation, Pee-wee rushes in to save the terrified animals, becoming an unexpected hero in the eyes of the firefighters present. However, just as he basks in the glory of his newfound fame, the authorities apprehend him and present him before Warner Bros. president, Terry Hawthorne. With all of his charm, Pee-wee argues for the rightful ownership of his bike.
In a surprising twist, Hawthorne agrees to dismiss the charges against Pee-wee, but only on the condition that he allows the studio to adapt his incredible story into a film. The resulting movie, a clever parody of the James Bond franchise, follows P.W. Herman and Dottie as they embark on a perilous mission to recover their stolen motorcycle, which curiously contains highly sensitive microfilm, from the clutches of the Soviet Union. The president of the United States himself makes an urgent phone call to P.W., emphasizing the bike's crucial role in national security.
As Pee-wee watches the story of his cinematic counterpart unfold, he can't resist the urge to connect with the people who have played significant roles in his journey. He sets up a mini-theater at a drive-in, treating old friends and acquaintances to snacks and drinks, celebrating their shared experiences. Amid this reunion, he encounters Francis, who tries to claim the role of Pee-wee's closest ally. However, in an unfortunate turn of events, Francis accidentally triggers one of the bike's clever gadgets, launching himself into the air.
Ultimately, Pee-wee acknowledges that he has relived his adventure through the magic of film. With a renewed appreciation for storytelling and the allure of Hollywood, he departs with Dottie, looking forward to fresh adventures, dear both on and off the screen.
