The Dragon Warrior has to clash against the savage Tai Lung as China's fate hangs in the balance: However, the Dragon Warrior mantle is supposedly mistaken to be bestowed upon an obese panda who is a tyro in martial arts.

In the Valley of Peace, Po Ping is revelling in his fulfilled dreams as he serves as the fabled Dragon Warrior protecting his home with his heroes now his closest friends. However, Po and company learn that the murderous Lord Shen of Gongman City is threatening the land with a fearsome new weapon that could mean the end of kung fu. They attempt to stop him, but the panda is burdened with crippling memory flashbacks linked to this villain. Now with China in the balance, Po must learn about his past and find true inner peace against all opposition.

When Po's long-lost panda father suddenly reappears, the reunited duo travels to a secret panda paradise to meet scores of hilarious new panda characters. But when the supernatural villain Kai begins to sweep across China defeating all the kung fu masters, Po must do the impossible-learn to train a village full of his fun-loving, clumsy brethren to become the ultimate band of Kung Fu Pandas.