In Antarctica three young penguins; Skipper, Kowalski and Rico defy the laws of nature to save an egg the other penguins believe to be doomed. After saving it from a pack of leopard seals and accidentally setting themselves adrift on an iceberg, the egg hatches into Private.
Ten years later, after the events of Pooh's Adventures of Madagascar 3: Europe's Most Wanted, the penguins invite Pooh, Simba, and the rest to leave the circus to celebrate Private's birthday by breaking into Fort Knox in order to treat him to a discontinued snack in the vending machine of their break room. Despite this, Private begins to feel out of place with the team; as Skipper is the leader, Kwolski is the strategist and Rico is the arsenal. Suddenly, they are abducted into the machine and sent to Venice, Italy by Doctor Octavius Brine a known scientist who removes his human disguise and reveals he is actually an octopus named Dave, who has grown jealous of penguins, after their nature of cuteness had shunned him out of every major zoo in the world. Rico devours Dave's collection of snowglobes along with a canister of a green substance called the Medusa Serum before the four escape and are chased through the streets of Venice. When cornered, they are rescued by a group of animals from a spy agency called "North Wind" consisting of their leader, a gray wolf named Classified, a harp seal demolitionist named Short Fuse, Corporal; a muscular polar bear and Eva, a snow owl with whom Kwolski is instantly smitten. Their mission; to protect the animals of the world who cannot protect themselves.
At their hideout, their communication systems are hacked by Dave, who reveals that he has an enormous supply of the Medusa Serum and that he intends to capture the penguins out of every zoo he was kicked out of. Not wanting the penguins' help, Classified sends the group to their most remote base (which happens to be on Madagascar) but the penguins awaken midflight and crash land in the Sahara Desert before making their way to Shanghai, which they mistake for Dublin, Ireland. Discovering Dave's next target in Shanghai; the penguins ship themselves to their current location and make their way to the zoo. Disguising himself as a mermaid-tailed penguin (as a tourist attraction) to distract Dave from his real target, Private himself is captured along with the Shanghai penguins after the North Wind arrives to put a stop to Dave's plan. The penguins take the North Winds' high-tech plane to give chase, but accidentally self destruct the machine. They manage to track Private to an island though, using a device planted on him when Classified tranquilized them. Meanwhile, on the island, Dave demonstrates his way to genetically mutate the penguins into hideous monsters as an effort to make humans disgusted in them as revenge.
Skipper and Classified argue on the best means to rescue the captives and stop Dave, settling on Classified's plan of a frontal assault. They are quickly captured however, and the other penguins are as well when North Wind does not return. Dave demonstrates his ray at full power on Private, apparently disintegrating him with the beam, but unbeknownst to them he has escaped. Private rescues Classified and the others who want to regroup but Private, not wanting to leave anyone behind goes to stop Dave. As Dave's submarine docks at New York with the promise of returning the penguins he found to the zoo, he turns the ray on the rest of the penguins, mutating them all into hideous monsters. The city erupts into chaos as the uncontrolled, mutated penguins run amok on the terrified human crowd. Getting the senses back into Skipper, Kowalski and Rico, they decide to connect the cute Private into the machine to return them to normal. Dave jumps into the path of the machine and is turned into a baby-like version of himself while the others attach his snowglobes to the machine, returning all the penguins back to normal in one shot.
Private is left mutated from the machine while the rest of the penguins are restored to normal. Private has been tinted pink and grown antlers. Despite his strange new look, the Penguins show their gratitude and newfound respect for Private. Dave has also been made cute by the ray and stuck in a snow globe where he is admired by a little girl. Finally seeing one another as equals, Classified promises to grant the Penguins anything they want. In addition to Kowalski getting a kiss from Eva, the Penguins are given their own jetpacks. The four Penguins then fly off above the clouds looking for their next adventure.
In a mid-credits scene, the Penguins return to the circus and plug Mort into the ray and use him to revert Private back to normal. Mort doesn't appear to show any side effects from the ray until he manages to swallow King Julien whole.
- Simba, Nala, Timon, Pumbaa, Tarzan, Jane Porter, Professor Archimedes Q. Porter, Terk, Tantor, Louis, Genie, Sebastian, Baloo, King Louie, Fu Dog, Rutt and Tuke, Roger Rabbit, Sora, Donald Duck, Goofy, the Mighty Morphin Power Rangers, The DigiDestined and their Digimon, The Crime Empire (Joker, Harley Quinn, Two-Face, The Penguin, Negaduck, Megavolt, Quackerjack, Bushroot, and The Liquidator), Scar, Zira, Shenzi, Banzai, Ed, Arthur and Cecil, Cheetayta and Cheetahto, and Pete guest star in this film.
- Like in the real film, Maurice will be absent in this film, making him the only member of the Jungle Adventure Crew not to appear, due to King Julien and Mort being the only other Madagascar characters appearing in the mid-credits scene of the real film.
- Penguins of Madagascar was released in theaters in 2014, the same year Winnie the Pooh: Springtime with Roo, The Jungle Book 1 and 2, and Tarzan were first released on Blu-ray and The Swan Princess: A Royal Family Tale was released directly on DVD, Blu-ray, and Digital HD.