While raiding a squab farm, Mr. Fox and his wife Felicity trigger a fox trap and become caged. Felicity reveals to Fox that she is pregnant and pleads with him to find a safer job when they escape.
Two years later (twelve in Fox Years), the Foxes and their sullen son Ash are living in a hole. Fox, now a newspaper columnist, moves the family into a better home in the base of a tree, ignoring the warnings of his lawyer Badger about how dangerous the area is for foxes. The tree is located very close to facilities run by three mean farmers consisting of Walter Boggis, Nathaniel Bunce and Franklin Bean. Soon after the Foxes move in, Felicity's nephew Kristofferson Silverfox comes to live with them, as his father has become very ill with double pneumonia. Ash finds this situation intolerable; his soft-spoken cousin is apparently superior to him at almost everything, and everyone, including his father, Mr. Fox, is charmed by Kristofferson at Ash's expense.
Fox and Kylie Opossum steal produce and poultry from the three farms. The farmers decide to kill Fox and camp out near the family's tree. When Fox emerges, the farmers open fire, but manage only to shoot off his tail. They then attempt to dig Fox out. After demolishing the site of the tree, the farmers discover the Foxes have dug an escape tunnel.
Reasoning that the Foxes will have to surface for food and water, the farmers lie in wait at the tunnel mouth. Underground, Fox encounters Badger and many other local animal residents whose homes have also been destroyed. As the animals begin fearing starvation, Fox leads Clive Badger, Rabbit, Mole, Beaver, Weasel and Rickety in a digging expedition to tunnel to the three farms, robbing them clean. While the other animals feast, Ash and Kristofferson, beginning to reconcile after Kristofferson defended Ash from a bully, return to Bean's farm, intending to reclaim Mr. Fox's tail. When they are interrupted by the arrival of Bean's wife, Ash escapes but Kristofferson is captured.
Discovering that Fox has stolen their produce, the farmers flood the animals' tunnel network with cider. The animals are forced into the sewers, and Fox learns that the farmers plan to use Kristofferson to lure him into an ambush. The animals are confronted by Rat, Bean's security guard. Fox and Rat fight in an electrical room until Fox pushes him into an electric generator, severely electrocuting him. Rat confesses Kristofferson's location before death.
Fox asks the farmers for a meeting in town near the sewer hub; he would surrender in exchange for Kristofferson's freedom. The farmers set up an ambush, but Fox and the others anticipate it and launch a counterattack. Fox, Ash and Kylie slip into Bean's farm. A much-matured Ash frees Kristofferson and braves enemy fire to release a rabid beaglenamed Spitz to keep the farmers at bay.
The animals become accustomed to living in the sewers with others considering moving in. Ash and Kristofferson settle their differences and become good friends. Fox leads his family to a drain opening built into the floor of a supermarket owned by the three farmers. Celebrating their new food source and the news that Felicity is pregnant again, the animals dance in their aisles.
- This film will mark the first debut of Princess Sapphire and Choppy from Princess Knight.