The film opens in a day care center where a group of babies listens to Archie, who spins a tale about a remarkable super baby named Kahuna. According to Archie, Kahuna dedicates himself to rescuing children across the globe, particularly from the clutches of the sinister Kane, who runs an orphanage. Their mutual animosity runs deep, but Kahuna always manages to thwart Kane's evil antics.
Archie's father, Stan, who seemingly owns the day care center, has allowed it to be transformed into a television set by the nefarious Biscane (alias Kane), who is launching his own TV channel. As Archie notices someone lurking in the bushes, he grows suspicious of Biscane's true intentions. Together with his friends—Finkelman, Alex, and Rosita—he sneaks into Stan’s office for a clandestine operation to uncover the truth. However, things take a turn when they are nearly discovered. In the fray, Kahuna supposedly saves Archie from oncoming danger, but the other babies remain skeptical about his existence.
Later, Archie’s older cousin, Kylie, takes the group to a children’s museum. On their way, they encounter more of Biscane’s henchmen, but once again, Kahuna mysteriously shows up to save the day, validating Archie's claims. They’re taken to Kahuna’s enchanting hideout in Hollywood, which resembles a massive playground, leaving Kylie feeling both amazed and bewildered. In an exciting twist, Kahuna transforms the babies into superheroes: Archie becomes Brain Boy, Alex takes on the role of Bounce Boy, Rosita turns into Cupid Girl, and Finkelman is dubbed Courage Boy. However, each baby expresses dissatisfaction with their new identities, prompting Kahuna to revert them back.
In an intriguing conversation, Archie learns from Zack (a boy Kahuna previously rescued) that the super baby once drank his father's secret formula, granting him his powers while also trapping him in the body of a child. After their encounter, Zack and Kylie find a disc containing evidence of Biscane's sinister TV plans, further confirming their fears. They resolve to investigate and thwart Biscane’s operations.
Zack, disguised as a policeman, joins forces with Archie and the others to observe as Biscane prepares to launch his channel, which is a front for his plot to control the world. Fortunately, Kahuna intervenes, destroying the satellites before making a quick exit. The babies are left feeling disheartened without him, but they realize that they simply need to believe in themselves to continue the battle.
Together, Stan, Archie's mother, Kylie, and Zack rally to support the babies as they embrace their superhero personas to honor Kahuna. This leads to a climactic showdown with Biscane, who reveals an unexpected familial connection to Kahuna—he's Kahuna's older brother, filled with resentment over being overshadowed. After an intense struggle, the babies manage to thwart Biscane’s plans, leading to a moment of poetic justice as he ends up regressing into a baby himself, now at the mercy of his own henchmen.
With the world saved, Kahuna prepares to depart, reminding Archie that friendship endures but he must fulfill his mission of rescuing children everywhere. In heartwarming scenes that follow, Zack reconnects with his mother, and the budding romance between Zack and Kylie blossoms. The film closes with an emotionally charged farewell as Archie watches Kahuna ascend into the sky, the super baby declaring that he will always be a hero. The moment leaves a profound impact, prompting tears from the audience as the credits roll.
