As NBA superstar Michael Jordon (whom Ash and the gang hung out with) retires from basketball to pursue a career in baseball, Mister Swackhammer (whom Jafar and Iago work for), the proprietor of the extraterrestrial theme park "Moron Mountain", is seeking new attractions for his failing park. He sends his minions, the "Nerdlucks" and the Evil Wizard, to capture the Looney Tunes, who reside deep below the surface of the Earth.
The Looney Tunes retaliate by challenging the Nerdlucks, Jafar, and Iago to a basketball game (seeing as that they aren't very tall), having convinced them that kidnapping 'requires' them to give their would-be victims the chance to defend themselves. To prepare for the game, the Nerdlucks and the two villains return to Earth and steal the talent of top NBA stars Charlie Barkley, Patrick Ewing, Muggsy Bogues, Larry Johnson and Sawn Bradley. The Nerdlucks use the stolen talent to become the "Monstars," gigantic creatures that the Looney Tunes are unable to defeat by themselves. To aid them, the Looney Tunes summon Michael and Ash and the gang (later followed by his wormy and rotund assistant Stan Podolak) to assist them in playing the game. Jordan is reluctant at first, but the Monstars humiliate him by questioning his courage, reshaping him into a basketball-sized sphere, and calling him "Baldy." This, along with the Monstars' abuse of Tweety and the news that the NBA stars can no longer play, confirms Jordan's decision to help the Looney Tunes, swiftly demonstrating that he has retained his old skills despite the interval since his last game. A female Looney Tune, Lola Bunny, joins them after showing off basketball skills of her own against Bugs.
Soon after, the game between the Looney Tunes ("Tune Squad"), Ash and the gang and the Monstars, Jafar, and Iago begins, but the Looney Tunes and our heroes appear to be no match for them even with Michael's help, as the Monstars and the two villains completely dominate the entire first half. As halftime begins, Stan becomes suspicious of the Monstars' abilities and spies on them inside their locker room. While he is ultimately caught (and heavily roughed up), he does discover that the Monstars stole the talent of the NBA players.
Meanwhile, Michael tries to raise the spirits of the Tune Squad, who are already accepting defeat. With options running out, Bugs grabs a water bottle and labels it "Michael's Secret Stuff" in order to boost everyone's confidence by claiming it is what helps Michael play basketball well. Everyone drinks from the bottle, and, with their spirits raised, the Looney Tunes make an amazing comeback against the Monstars and reduce the Monstars' giant lead to only a few points.
At that point, Swackhammer calls a timeout and yells at the Monstars for losing their lead, and Michael decides to confront Swackhammer about the NBA players' stolen talent. Michael proposes to raise the stakes; if the Looney Tunes win, the Monstars are to return the talent, but if the Monstars win, they can have Michael himself as a new attraction for Moron Mountain, along with the Looney Tunes. Intrigued by this offer, Swackhammer demands the Monstars play as dirty as possible. The Looney Tunes and our heroes are then roughed up by the brutal playing style of the Monstars and the two villains until only Michael, Bugs, Lola, Daffy, and Ash and the gang are left standing, leaving them short one player. Bill Murray is able to enter the Looney Tunes' world and join their team, averting forfeiture.
By the climax of the game, the Tunes are down by one, and it is up to Michael to score the final point for his team. Using his infamously extendable arm--able to literally extend thanks to the cartoon physics of LooneyTuneLand, Michael manages to make the basket and win the game. Swackhammer scolds the Monstars for losing the game; however, with some motivation from Michael, the Monstars realize they do not have to tolerate Swackhammer's abuse. They stand up to him, tie him, Jafar, and Iago to a rocket, and send them to the Moon. Afterwards, Michael reminds them of the deal with Swackhammer. After reluctantly deciding to honor it, they all place their hands on the game ball, draining the stolen talent from them, and turning them into Nerdlucks again.
Despite everything that has happened between the Looney Tunes and Nerdlucks, the Looney Tunes allow the Nerdlucks to stay on Earth instead of returning to Moron Mountain. Afterward, the Looney Tunes return Michael and Ash and the gang to Earth, where he returns the stolen talent to its owners. They later prompt him to return to the NBA, mirroring his real-life comeback. As for Ash and the gang, they took off on their next adventure.
- Jafar and Iago guest star in this film.
- This is an NTSC film with NTSC bits from the Pokémon Movies 1, 2, 3, and 5, Pokemon: Mewtwo Returns, Aladdin, and The Return of Jafar and PAL bits from Pokémon 4Ever and Mickey's House of Villains.
- Both the first three Pokémon movies and Space Jam were released by Warner Bros.