daffy duck tired of playing "stooge" to the "long-eared, carrot-chomping, overbite-challenged" Bugs Bunny, demands better treatment from the Warner Brothers. Kate Houghton (Jenna Elfman), the Vice President of Comedy, reveals to a heartbroken Daffy that Bugs is much more popular than Daffy, saying that while Bugs enjoys universal appeal, the duck's fan base is limited to
When Daffy discovers he has been fired, he is escorted out of the board room by Kate and Bugs.
Meanwhile, DJ Drake (Brendan Fraser), a security guard, fails an audition for a stuntman job. He is then asked to escort a distraught Daffy Duck off the lot, however, Daffy escapes and runs rampant through the studio. He attempts to commandeer the (Batmobile) but crashes it into the studio's water tower, causing it to topple over, drenching Kate and Bugs, who were driving by. DJ himself is then fired in a scene inspired by the 1960s TV series Branded.
Some of the other cartoon characters are struggling in stardom, especially Porky Pig and Speedy Gonzales. Scooby Doo and Shaggy (both are appropriately voiced by Frank Welker and Casey Kasem) confront Matthew Lillard who portrayed Shaggy in the live-action Scooby Doo movie. Kate tries to change Bugs' famous gags by teaming him up with a female co-star. Bugs counters this with his famous crossdressing gag.
DJ returns to his home, next door to Granny, Sylvester, and Tweety Bird, and finds Daffy has hitched a ride, as he has nowhere else to go. Daffy learns DJ is Damian Drake's son. Daffy believes Damian is a spy, while DJ thinks he is merely an actor who portrays a spy. When it is revealed that both are right, and that Damian is in trouble over the Blue Monkey Diamond, DJ departs. His only clue, the nightclub actress "Dusty Tails" in Las Vegas. All of DJ's attempts to throw Daffy out of his pizza-delivery car fail, so that they leave together.
About this time, it is revealed DJ has played Brendan Fraser's stunt double many times and he considers Brendan to be very unpleasant.
Meanwhile, the Warner Bros. decide Kate that misled them into firing Daffy and that they want him back. Bugs' phone call to Daffy is rebuked.
Unknown to Daffy and DJ, their conversation is being watched by the board of directors of the ACME Corporation. The eccentric yet intimidating Mr. Chairman (Steve Martin) wants the Blue Monkey for his own "diabolical ends"
Kate goes to DJ's house and finds Bugs, and also discovers that DJ is Damian Drake's son. They head out in Damian's true spy car, (a TVR Tuscan).
DJ and Daffy arrive at Las Vegas and enter the Wooden Nickel casino owned by the midget cowboy, Yosemite Sam, who is an operative of ACME. Mr. Chairman informs Yosemite Sam to keep the two protagonists within the casino. Mr. Smith (Bill Goldberg), Mr. Chairman's hitman offers Sam a treasure chest and strikes him with it. Foghorn Leghorn introduces the casino's next act, which is Dusty Tails, played by Heather Locklear. DJ approaches Dusty; she reveals she is a spy like Damian. She gives DJ a Queen of Diamonds playing card that will apparently help him find the Blue Monkey. Daffy boasts that he does not know the meaning of the word "fear", until Yosemite Sam and his underlings, Nasty Canasta and Cottontail Smith, appear with a cannon. Daffy goes "Fear: noun, a state of terror" before being blasted into a fire extinguisher. DJ attempts to fight their way out of the casino, but things stop when the card is lost on the gambling floor. DJ manages to win a game and recover it. His car falls to pieces when the two leap in.
Yosemite Sam and his cronies commandeer Jeff Gordon's racecar and chase Daffy and DJ. They find Kate and Bugs; all four drive off in the spy car with the cowboys not far behind. After taking a wrong turn, the quartet find themselves heading towards a dead end. Daffy utters the word "mother", which the car interprets as a request to take them to that person, and activates its flight mode, flying into the air. Sam is considerably less lucky: his car crashes into a wall, catapulting him into a fireworks store. He lights a match - and is blown skyward.
The car continues flying towards "mother", however it crashes in the middle of the desert. Later at a campout, Daffy expresses his jealousy of Bugs with the statement: "All you have to do is nibble a carrot and people love you."
The next day, the heroes come across a Wal-Mart store in the middle of the desert (which is assumed to be a mirage) and get free stuff in exchange for endorsement of Wal-Mart. Mr. Chairman's father, another VP, suggests they get the "Desert Operative", Wile E. Coyote, to deal with the heroes. His attempt fails.
The heroes stumble across Area 52, a secret military base where aliens are stored. The base's leading researcher, known as Mother (Joan Cusack) has been expecting DJ and reveals to him that the Blue Monkey is a powerful gem that can be used to turn the human race into monkeys. Marvin the Martian who is imprisoned within Area 52, is ordered to attack the heroes. Using other aliens, including Daleks, he causes a mass riot, which the heroes escape.
They realize that a picture of the Mona Lisa is on the playing card and head to the Louvre in Paris. DJ manages to find a map of Africa. Elmer Fudd appears wanting the window and reveals that he is secretly evil. Bugs and Daffy flee from Elmer throughout the museum, leaping into several paintings like The Scream. Kate is kidnapped by Mr. Smith and taken to the top of the Eiffel Tower. Beaky Buzzard flies overhead in a helicopter. Mr. Smith escapes with a photographed copy of the map. Bugs and Daffy defeat Elmer by running into another painting that results in Elmer's coming out in a pointillism effect. Bugs blows him to pieces using a fan. Kate falls off the side of the Eiffel Tower, but is saved by DJ.
ACME prepares to head to Africa. Mr. Chairman decides to unleash his most vicious operative: Taz. The VP for Never Learning criticizes Taz, and the Chairman releases Taz upon the VP, eating all but his skeleton.
In Africa, DJ, Kate, Bugs and Daffy run into Granny, Sylvester and Tweety riding an elephant through the jungle. They hitch a ride and discover some ancient ruins and the Blue Monkey itself. Granny, Sylvester and Tweety unzip bodysuits to reveal themselves as Mr. Chairman (the film's second example of crossdressing), Mr. Smith, and Taz in disguise. All but Taz and Mr. Smith are teleported back to the ACME building.
DJ and Kate are chained up and find Damian on a railway track about to be run over by the Train of Death driven by Wile E. Coyote, with, for good measure, crates of TNT next to him and a 2-tonne anvil over his head. They are also attacked by a giant ACME Guard Dog. Bugs and Daffy go into outer space after Marvin the Martian to a satellite where the Blue Monkey will transmit a transformative beam around the globe. Bugs battles Marvin with a lightsaber while reading a book called "The Force For Dummies". Daffy becomes Duck Dodgers and saves the day by deflecting the satellite.But he explodes with the Jetpacks. DJ saves Damian, outwits the giant dog, and destroys the Train of Death. Marvin is trapped in a bubble and floats off into space. Mr. Chairman, now a monkey, is arrested with a little pair of monkey sized handcuffs.
Bugs and Daffy talk about the adventure while it is revealed the whole thing is just a movie. DJ punches Brendan Fraser. Bugs then reveals that he has decided to let Daffy be his equal partner. Daffy remarks that his luck may be changing; however, he is flattened by a falling round metal plate which is revealed to be the symbol of the Looney Tunes. Porky Pig fails to perform his trademark ending spiel and he instead tells the audience to go home.