The story begins in an icy realm inhabited by blue penguins, where a formidable ship belonging to the Koopas descends from the skies. Upon landing, the Koopa army emerges to confront the defenseless penguins. Suddenly, Kamek (Kevin Michael Richardson) steps forward to introduce their malevolent king, Bowser (Jack Black). As the penguins make a feeble attempt to defend themselves, Kamek uses his sorcery to cast them aside effortlessly, just before Bowser unleashes his fiery breath to obliterate the penguins’ icy home. The villainous Bowser then approaches a question mark box, smashing it open to reveal the coveted Super Star. He arrogantly declares that no one can stand in his way.
Meanwhile, in Brooklyn, two brothers, Mario (Chris Pratt) and Luigi (Charlie Day), are watching a commercial for their fledgling plumbing business. They are belittled by their former boss, Foreman Spike (Sebastian Maniscalco), but Mario stands up for his timid brother, who often feels overwhelmed. Shortly after, they receive a call for their inaugural job. Unfortunately, their van breaks down, forcing them to dash through a construction site to reach their destination.
Upon arriving at the upscale home of a well-to-do couple, Luigi already stumbles by stepping on their dog Francis’ toy. Mario quickly addresses their leaky faucet, but chaos ensues as Francis chases after them, leading to a series of comedic mishaps in the bathroom that culminates with Mario and Luigi rescuing the dog from nearly falling out of a window.
Back at home, the brothers share dinner with their family, enjoying pasta with mushrooms (despite Mario's distaste for mushrooms). Their parents express skepticism about their plumbing ambitions and dismiss it as a fanciful dream, which leaves Mario feeling heartbroken. Luigi comforts him, and Mario voices his desire to stop feeling so insignificant. They soon catch wind of a massive pipe burst in downtown Brooklyn, prompting Mario to believe that only they can resolve the situation.
Diving underground as the streets flood, the brothers trace the source of the problem, but they ultimately fall deeper into the sewers, stumbling upon a network of pipes that unexpectedly suck them into different realms.
Luigi finds himself in the sinister Dark Lands, pursued by skeletal creatures known as Dry Bones. Just as he thinks he’s evaded danger by entering a castle, he is captured by little masked minions called Shy Guys.
On the other hand, Mario lands in a vibrant land filled with gigantic mushrooms, where he meets a friendly Toad named Toad (Keegan-Michael Key). Mario explains his predicament, and Toad deduces that Luigi must be in The Dark Lands. Eager to help, Toad guides Mario to the Mushroom Kingdom for assistance.
Upon arrival at the castle of Princess Peach (Anya Taylor-Joy), Peach acknowledges the looming threat of Bowser and is already devising a strategy to face him, particularly after he has taken the penguins captive. Toad helps Mario sneak in to meet Peach, who is thrilled to meet another human. Mario requests her help in locating Luigi, and she agrees, but only if he proves himself worthy.
Peach presents Mario with an obstacle course, easily traversing it herself. She introduces him to power-ups, notably mushrooms, and Mario consumes one that enhances his size and strength. However, he learns that each time he gets hit, he loses that power. After daring hours of dodging perilous traps, he finally impresses Peach, who decides he can help in the fight against Bowser. Leaving the castle with Toad, they embark to the Kong Kingdom, joined by Toad.
Before they set out, Peach demonstrates her unique ability to wield fire using a flower. When Mario inquires about her origins, Peach reveals that she came to the Mushroom Kingdom as a lost child, raised by the Toads before being crowned princess.
Meanwhile, on his ship, Bowser reveals his devious plan to marry Peach and rule alongside her using the Super Star. Later, as Bowser plays a melancholic piano tune, Kamek interrupts with the news of Peach’s sightings with Mario, inciting jealousy. Bowser then captures Luigi and tortures him for information about Mario.
Upon arriving in the Kong Kingdom, Mario seeks the aid of Cranky Kong (Fred Armisen) to recruit his army against Bowser. Cranky dismisses them at first, but when Mario steps up to save Luigi, Cranky agrees—on the condition that Mario defeats his son in the arena.
The arena battle pits Mario against Donkey Kong (Seth Rogen). At first, Mario struggles, but he starts utilizing various power-ups. After a few humorous attempts, including one where he shrinks, he dons a cat suit that grants him agility and reflexes, ultimately outmaneuvering DK and winning Cranky's favor.
Meanwhile, Luigi faces his own difficulties in captivity, sharing a space with the captured penguins and their king, as well as a quirky and cheerful star named Lumalee.
As Mario, Peach, and Toad gear up for the showdown against Bowser, they must navigate many hazardous encounters across Rainbow Road, evading ambushes from Bowser’s army. During their battle, Peach showcases her bravery by saving Toad from falling off a bridge, while Mario navigates dangerous traps and explosive devices.
Despite their efforts, Mario and Donkey Kong face a tumultuous fall into the ocean, where giant creatures named Maw-Rays threaten their escape. The duo cleverly improvises to escape the creature's stomach and jet back toward the Mushroom Kingdom.
Back in the kingdom, Peach rallies the Toads for evacuation, but Bowser’s forces catch up with them. Under the threat of Kamek's torture, Peach reluctantly agrees to marry Bowser. The wedding is interrupted when she unveils her true intentions and transforms using a mystical flower, freezing Bowser in place and igniting a fierce battle.
With Luigi teetering on the brink of doom, help arrives from Donkey Kong, who has been powered-up through camaraderie. Together with Mario, who dons a Tanooki suit to soar through the chaos, they confront Bowser's tyranny. In an explosive climactic sequence, Mario and Luigi become invincible after touching the Super Star, allowing them to vanquish Bowser and save their friends.
In the aftermath, Mario and Luigi bask in the gratitude of their family, friends, and the citizens of Brooklyn, now heroes for their brave actions.
As they return to their plumbing business, they find themselves happily residing in the Mushroom Kingdom, ready for their next whimsical adventure through a portal pipe.
Mid-Credits Scene: A diminutive Bowser attempts to serenade in his confinement until Toad tells him to be quiet.
Post-Credits Scene: In the depths of Brooklyn's sewers, a small, speckled egg begins to hatch, and a little voice calls out,..."Yoshi!"
