The film starts with a parody of the 1981 Indiana Jones action film Raiders of the Lost Ark. Afterwards, the babies are chased out of the temple by a boulder but the boulder and the imagination was Didi Pickles who is at the baby shower at the Pickles' house, where Didi is pregnant with her and Stu's second child, which everyone believes will be a girl. Tommy is at first enthusiastic about having a younger sibling, although Angelica warns him that once the sibling is born, Stu and Didi will forget him. Eventually, the baby is born, and it is a boy, who they name Dil, after Didi's cousin. Unfortunately, Angelica's words appear to be true when Dil quickly becomes a very selfish baby, crying non-stop for attention, keeping all of the babies' toys for himself, and refusing to share with Tommy. He also takes the attention of Didi and Stu, leading Tommy to feel ignored.
When Dil pushes the babies too far, they decide to take him back to the "Hopstical" and end up driving recklessly through the streets in a Reptar Wagon Stu had built until they crash in the woods. As Dil had secretly pinched Angelica's Cynthia doll, Angelica and Spike embark on a mission to find the babies - but Angelica only wants to get back her Cynthia doll. Around the same time, a circus train suffers an accident in the same woods and a group of wild monkeys escape from the wreckage, while the monkeys' owners, the Banana Brothers, attempt to search for them. The parents soon discover their children's absence, and call the police and rangers for help, and the news leaks out and reporters come to interview them.
As the babies attempt to find their way back home, the Reptar Wagon goes into the river and enters its water mode, and for a time, Tommy and the Babies pretend to be pirates sailing the open seas. Since Dil is not very well liked, Chuckie, Phil and Lil disguise a smaller monkey as Dil, but Tommy sees through their farce and gets angry, vowing to find his brother himself. Eventually Tommy finds Dil and they find shelter underneath a tree. Tommy tries to look after Dil, but when Dil selfishly drinks all of their milk and refuses to share the big blanket with Tommy in the cold weather, Tommy finally reaches his breaking point, snaps at Dil and decides to abandon him for the monkeys to take him away, but a bad storm combined with Tommy's furious face finally frightens Dil. Tommy realizes what he is doing and stops. Feeling guilty, Tommy apologizes to his brother and takes him back under the tree. Dil, who turns over a new leaf, willingly shares the torn blanket with Tommy. After the thunderstorm is over, Phil, Lil and Chuckie catch up with Tommy and Dil and save them from the monkeys, and are eventually reunited with Angelica and Spike.
As the babies make it to a bridge over by the ranger station, they are confronted by a wolf that has been stalking them all day. Just as the wolf is about to attack them, Spike comes to their rescue and pounces on top of the wolf stopping it from harming the babies. The two animals fight as the babies cheer Spike on. However, the wolf almost knocks Spike over the bridge, but Angelica calls it to the wolf distracting it from finishing Spike off. The wolf tries to attack Angelica, but Spike bites its tail, dragging them both off the bridge to their apparent deaths.
Luckily, Stu finally finds the babies and crash lands through the ranger station. Emerging from the wreckage stuck under his Dactar glide, the babies mistake him for the "Lizard" and wish for Spike's life instead of returning home. Stu falls through the bridge, finding Spike alive and unharmed. Simutaneously, the parents arrive and are reunited with the children.
In the final scene, the babies have another imaginary adventure, along with Dil, finally accepting him as one of them.
In the post credit scene, Boris' goat pushes the reptar wagon where Grandpa Lou is sleeping and the goat follows it into the horizon.
