A garish spaceship shaped like a garbage can is spotted flying near Earth, only to later reveal itself inside the vintage shop owned by Captain Manzini. In a nearby park, a young boy named Dodger faces harassment from a group of four older bullies, led by Juice. The situation escalates as Juice robs Dodger of his money, leaving him in a puddle. Seeking refuge, Dodger heads to Manzini's shop where he works. There, Manzini takes the boy's wet clothes to clean them, cautioning him to steer clear of the enigmatic garbage can.
Later, Dodger catches sight of Tangerine, Juice's girlfriend, who appears to show him a glimmer of empathy. Enthralled, he tries to convince her to purchase something from the shop while covertly inhaling her scent as she is distracted. Trouble brews as the bullies burst into the store, intent on harassing Dodger once more. Ingeniously, he manages to outsmart them, but during their altercation, the garbage can tips over, unleashing a mysterious green ooze. The bullies then drag Dodger into a sewer, handcuffing him to a rail and dousing him with sewage. Just when it seems all hope is lost, he is rescued by the quirky group known as the Garbage Pail Kids.
Upon Manzini's return, he expresses his discontent at the Garbage Pail Kids' release, yet introduces Dodger to them: Greaser Greg, a tough greaser with a fierce demeanor; Messy Tessie, a girl perpetually battling a runny nose; Windy Winston, an eccentric boy in a Hawaiian shirt with a propensity for flatulence; Valerie Vomit, who has the unsettling ability to vomit on command; Foul Phil, a whining and hungry baby with bad breath seeking parental figures; Nat Nerd, a chubby boy with acne who dresses like a superhero; and Ali Gator, the whimsical leader with a taste for human toes. Manzini warns that these peculiar children must avoid mingling with "normies," or regular people, as they are likely to face rejection.
The following day, Dodger accompanies Tangerine to a nightclub where she showcases her clothing designs. Awkward tension arises when she removes her shirt to sell it, leading Dodger to hide upon the arrival of Juice. Meanwhile, the Kids cause chaos by stealing a Pepsi truck, using it to flatten Juice's vehicle, then indulging in stolen food during a campfire. The morning after, nursing food comas, the Kids surprise Dodger with a home-sewn jacket that impresses Tangerine, prompting her to ask him for more clothing to sell. They eagerly craft additional attire for him after swiping a sewing machine and singing an endlessly annoying song about teamwork, but their excitement fades, and they decide to venture outdoors disguised as regular kids.
Their escapades land them in a theater screening Three Stooges shorts, where they attract attention with their unruly behavior. Ali and Winston stir up a bar fight after Ali's insatiable appetite for toes gets the better of him, yet they impress the bikers involved, ultimately celebrating together with drinks. Meanwhile, Tangerine capitalizes on the Kids' designs for her upcoming fashion show. On the night of the event, she locks the Garbage Pail Kids in the basement of Manzini's shop to keep them contained, but they are soon captured by Juice and his gang, who take them to the State Home for the Ugly, a grim facility for society’s castaways who face dire fates. This establishment houses figures like a grotesquely overweight Santa Claus, an excessively bald Gandhi, a gaunt Abraham Lincoln, a frail elderly man, and a comically silly clown.
With the help of Manzini and Dodger, they evade capture and rush to the fashion show, ultimately wreaking havoc by dismantling the runway and its outfits, while Dodger confronts Juice in a climactic fight. In the aftermath, Juice and his crew find themselves arrested, potentially facing a lengthy sentence. Later that night, Tangerine seeks reconciliation with Dodger, but he refuses her apology, recognizing her underlying greed. Meanwhile, Captain Manzini attempts to sing the Garbage Pail Kids’ song in reverse to coax them back into the garbage can, but the Kids slip away on stolen ATVs, ready to unleash more chaos on the world.
