In Imperial China, a soldier named Jinbao Lam Tze-Chung hears a tale of Merryland from his grandfather, who passes along a treasured necklace. His Captain warns that true peace may still be out of reach. During a brutal raid on their camp, Jinbao tumbles off a cliff and awakens to find himself in Merryland, transformed into a panda. He is rescued from a perilous fall by Flying Pig Wang Mijia, who becomes his first ally in this strange land. As Jinbao explores this magical realm, he learns that Merryland is ruled by an evil master and his Phantom Army, and that a prophecy speaks of a Panda Warrior who will play a pivotal role in the fate of the land.
While roaming a dense forest, the group is ambushed by a gigantic spider. They are joined by Mantis [Hu Jun], who soon becomes a steadfast ally. Their journey leads them to a village of talking onions, which is under attack by the Phantom Army, led by Charcoal Puppet Vanguard [Zheng Yang], a pyrokinetic tree spirit with a formidable presence. The encounter tests the team’s resolve, but Jinbao, backed by Flying Pig, manages to subdue Charcoal in a nearby river.
A Ginseng Spirit [Hao Yu Lan] arrives and performs the Song of Peace, purifying Charcoal. Jinbao learns from the Spirit that rest is essential to gathering the energy required to perform the Song of Peace. With Charcoal now purified, he chooses to join Jinbao and the others on their quest.
As they travel through fields, Jinbao, Flying Pig, Mantis, and Charcoal are attacked by the Phantom Army’s general, Cattle. They are soon joined by Flying Pig’s fellow rebels: Cotton Sheep Sister [Ke Siming], Steel Mouth Chicken, Horse [Xiang He], Big-Eyed Monkey [Jack Tu], Golden Retriever [Jerry Liau], and Big-Eared Rabbit [Jiao Jiao]. Despite the odds, the group drives Cattle off a cliff, and Jinbao begins to understand the strengths and quirks of each member, even ribbing Horse by noting he looks more like a hippopotamus than a horse.
The rebels reach the rebellion’s headquarters and meet Lion King [Ji Tao]. Upon seeing Jinbao, Lion King reveals a truth: Jinbao is not the Panda Warrior of legend—yet the island’s history explains that Merryland is guarded by the celestial whale Hope and Faith. When Hope absorbs too much of the Dragon Ball of Light, a warrior from Earth emerges as the Panda Warrior. Jinbao realizes that the Panda Warrior is his grandfather, who defeated Hope and returned to his world with the necklace from Merryland’s ruler Princess Angelica. A new threat arrives in Merryland when an evil rat infiltrates the land, seizes Hope’s body, and transforms her into a giant, nine-headed monster bent on enslaving Merryland. Jinbao asks Lion King to train him, and through a series of painful yet humorous trials, Jinbao earns his place.
Jinbao and Charcoal visit the Fox Elder to locate the Nine-Headed Snake’s lair, where Princess Angelica is being held captive. They obtain a stone fragment from the lair and a fragment of emergency paper, and reunite with Cotton Sheep Sister, who warns that the other rebels have been captured by the Phantom Army. Reaching the lair, they confront a corrupted Flying Pig and push forward through treacherous caverns, only to be captured by corrupted rebels and dragged before Cattle. It’s revealed that the rebels had feigned corruption to mislead Cattle, and the Ginseng Spirit arrives to purify Cattle, who then joins the rebels in the mission to rescue Princess Angelica.
Deep inside the lair, the Nine-Headed Snake ambushes the group. Each fighter targets a different head, but the monster’s heads regenerate faster than they can strike. Charcoal sacrifices himself to buy time for the others to reach Princess Angelica. A partially burned document hints that a sacrifice may be required to save everyone. Cattle courageously negotiates a perilous passage through toxic water to reach the chained princess, the poison slowly corroding the Dragon Ball of Light. He collapses from exhaustion, but Jinbao hopes for his recovery as the Nine-Headed Snake presses the chase. Mantis shovels a tunnel to help the others escape, and the flying lair begins to crumble behind them.
Dawn breaks and Steel Mouth Chicken crows to herald the sun. Jinbao faces the Nine-Headed Snake again, while Princess Angelica notes that the monster is weakest in daylight. The rebels rally, and the Ginseng Spirit again uses the Song of Peace to weaken the beast. Faith returns to restore the land, purify the Phantom Army, and revive Cattle and Charcoal. The rebels execute a synchronized, head-to-head assault against the many heads, though they become entangled in their own attack. Cotton Sheep Sister targets the Wind Head, Horse attacks the Water Head, Mantis fights the Ice Head, Big-Eared Rabbit tackles the Fire Head, Big-Eyed Monkey engages the Electric Head, Flying Pig strikes the Poison Head, Golden Retriever faces the Spear Head, Steel Mouth Chicken attacks the Bewitching Head, and Jinbao delivers the decisive blow to the main head. The final strike shatters the Nine-Headed Snake, and the malevolent rat escapes Merryland.
What remains of the snake is restored to Hope, who rejoins Faith in the sky. Princess Angelica awards them the Dragon Ball of Light as she proclaims that Hope and Faith will continue to safeguard Merryland. The realm celebrates its victory, and the resilience of its new defenders.
During the credits, Jinbao returns to Earth and spars with his Captain using the moves learned in Merryland, sharing a moment of camaraderie as they toast to a hard-won, peaceful balance.
