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When David Seville goes off to Europe on a business trip, Hubie, Marina, Rocko, Splatter, Petra, Beanie, Timmy, Pikatwo, Bonkers, Fawn, Buck, Stanley and the Chipmunks, Alvin, Simon and Theodore are left at home with a babysitter, Miss Miller - much to the dismay of Alvin. While they are playing an arcade game of Around the World in Thirty Days with the Chipettes, Alvin and Brittany argue over which would win an actual race around the world. Diamond smugglers Claudia and Klaus Furschtein overhear the conversation and approach the children, telling them that they will provide them with the means for a real race around the world by hot air balloon, with the winner receiving $100,000.

Later that night, Hubie and his friends talk about who will accompany each team in this competition. In the end it is decided that Hubie, Marina, Rocko, Splatter and the bird kids will join the Chipmunks while Bonkers, Fawn, Pikatwo, Buck and Stanley will join the Chipettes.

After tricking Miss Miller, the Chipmunks and Chipettes meet with Hubie and his friends at the Furschtein' mansion, where they are told the rules: each team is given a separate route to follow, along with a chest of dolls, made in the Chipmunks and Chipettes own likenesses, which they are required to drop off to verify that they have visited all checkpoints. Upon dropping off one of their own dolls, they will receive a doll made in the likeness of a member of the opposing team. In reality, the dolls being dropped off are filled with diamonds, and the dolls received are filled with cash, given to them by the buyers. Both teams begin their travels; while the Chipmunk Team go to Mexico City, the Chipette Team are caught in a hurricane and Brittany comes very close to becoming eaten by a shark in Bermuda. Unknown to both teams, however, they are being chased by two INTERPOL agents, sent by Inspector Jamal, who has been informed by Claudia and Klaus' butler, Mario, of the Furschteins' operation. The agents silently follow behind as the teams travel to many exotic locations. Both teams meet up in Athens, where Alvin and Brittany begin bickering, each claiming they can "out-rock and roll" the other. What ensues is a large-scale musical number set in a nearby temple before they part ways in their separate balloons, with Dave and the two INTERPOL agents nearly spotting them.

The Chipette Team then travel on to Egypt, where they are captured and brought to a young Arabian prince. The prince falls in love with Brittany and is delighted by Bonkers' sense of humour, oblivious to the diamond smuggling, agrees to return the valuable dolls to Jamal but declares that he is keeping the girls, and making Brittany his bride and Bonkers his jester. Despite being showered with gifts, including a baby penguin, the team are desperate to make an escape. Still unaware of the contents of their dolls, they secretly try to retrieve them only to find them guarded by snakes. Brittany and Jeanette "charm" the snakes by singing "Getting Lucky", while Bonkers and Fawn dance with them. Then grab the dolls and escape just as Eleanor, Pikatwo, Stanley and Buck arrive carrying a small cooler.

Meanwhile, the Chipmunk Team are camping in a jungle near a native village while taking a shortcut. Theodore senses something is wrong; but the others don't believe him. Upon waking up the next morning, they find Theodore missing. While trying to find him, Alvin, Simon, Hubie, Marina, Rocko, Splatter and the kids are taken captive by some local natives. They soon learn that Theodore is being worshipped as the natives' "Prince of Plenty". The team are made into Theodore's personal servants.

Meanwhile, the Chipette Team learn that the cooler contains not food, but the baby penguin, whom Eleanor, Buck, Stanley and Pikatwo feel needs to be returned to its parents in Antarctica. They soon decide to head to Antarctica and sing the song "My Mother". However, Claudia is alerted to the Chipette Team's actions by her henchmen, and concludes that they must have discovered the diamonds and are trying to escape with them. She orders her henchmen to get the dolls back. As the team deliver the young penguin to its parents, Bonkers discovers that the baby penguin's mother is in fact Marina's cousin. Just after she thanks them for returning her baby, they are attacked by Claudia's henchmen. They wrestle with the men as they attempt to steal the dolls, and a doll tears as the henchman falls from the balloon. Grateful to the team, the penguins snowball the henchmen into submission as the girls escape. They then notice the torn Chipette doll lying on the floor of the balloon; Jeanette picks it up and diamonds fall out of it. Opening a Chipmunk doll, they find it full of dollar bills, and realize that the whole race was just a set-up to deliver the diamonds. Realizing that the Chipmunks as well as Hubie and the rest are likely in danger as well, they head off to find them.

The Chipmunk Team, meanwhile, are forced to search a nearby cave for mushrooms, with Alvin growing increasingly fed-up with the situation. Inside the cave, they find a series of ideograms on the walls, which Simon is able to translate -thanks to his vast intellect. The ideograms tell of the Prince of Plenty being sacrificed on a full moon, which is that night. Before long, all the team are tied to stakes by the natives, hanging precariously above a pit full of crocodiles. In a desperate attempt to delay their own deaths, they sing "Wooly Bully," which pleases the natives and lasts just long enough for the Chipettes to rescue them.

Together in the Chipettes' balloon, they return to Los Angeles, where they are met at the airport by Claudia and Klaus. After a high-energy chase through the baggage claim (with the song Diamond Dolls), the two groups are forced into a car under the false threat of Miss Miller's being kidnapped. Dave is arriving home to the airport at the same time, and hears Alvin's cries for help. Inspector Jamal runs up, identifying himself, and he and Dave begin to make a chase. While it at first appears that Claudia and Klaus will escape, they are accidentally run off the road by Miss Miller as she is heading to the airport to pick Dave up, who happens to drive up the wrong way towards them by accident. The diamond smugglers are arrested, and Brittany and Alvin argue over who really won the race, but Dave breaks up the argument and guides them to Miss Miller's car. Dave tells Alvin that he and the rest have a lot of explaining to do. Alvin repeatedly protests about being entitled to the promised prize money, causing Dave to yell "ALVIN!" as the film ends.

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