In the Valley of Peace, a land in ancient China inhabited by anthropomorphic animals, the giant panda Po is a kung fu fanatic who idolizes the Furious Five – Tigress, Monkey, Mantis, Viper, and Crane – a quintet of kung fu students trained by the red panda Master Shifu. As he helps his adoptive goose father Mr. Ping in his noodle restaurant, Po is unable to pursue his dream of becoming a kung fu master himself.
Grand Master Oogway, an old tortoise and Shifu's mentor, has a vision that Shifu's former student, the evil snow leopard Tai Lung, will escape from prison and return to the Valley of Peace to take revenge for being denied the Dragon Scroll, which is said to hold the secret to limitless power. Shifu is alarmed and sends his messenger, Zeng the goose, with a request for the prison to heighten security in order to prevent Tai Lung's escape. He then holds a kung fu tournament for the Furious Five so that Oogway may identify the Dragon Warrior, the one kung fu master worthy of receiving the Dragon Scroll and capable of defeating Tai Lung. Forced to take a cumbersome noodle cart to the tournament, Po arrives as the arena doors close and is unable to enter. Desperate to see the Dragon Warrior chosen, Po straps himself to a set of fireworks, rockets into the sky, and crashes into the middle of the arena and opens his eyes to see Oogway pointing his finger at him. To the shock of everyone present, Oogway proclaims Po as the Dragon Warrior.
Unwilling to accept that Oogway's decision was intentional, Shifu tries to get rid of Po through a torturous and agonizing training regime. The Furious Five also scorn and disparage Po as an upstart with no skill or potential in kung fu. However, after receiving encouragement from Oogway, Po endures his training and slowly begins to befriend the Five with his tenacity, culinary skill, and good humor. Meanwhile, Tai Lung escapes from prison as foreseen by Oogway, ironically picking his locks with one of Zeng's fallen feathers. Shifu learns of Tai Lung's escape from Zeng and informs Oogway, who extracts a promise from Shifu to believe in Po, and then passes on to the heavens in a stream of peach blossoms. Still unable to grasp the basics of kung fu, Po despairingly admits that he has no chance of defeating Tai Lung. Shifu, however, discovers that Po is capable of impressive physical feats when motivated by food. Using this as positive reinforcement, Shifu successfully trains Po to incorporate these feats into an effective kung fu style.
Meanwhile, the Furious Five set out to stop Tai Lung themselves, only to be overwhelmed and defeated by Tai Lung's nerve strikes. Shifu decides that Po is ready to receive the Dragon Scroll, but the scroll reveals nothing but a blank reflective surface. Unable to understand the message of the scroll, Shifu orders Po and the Five to evacuate the valley. As Tai Lung arrives and fights Shifu, the distraught Po finds Mr. Ping who, in an attempt to console him, reveals that the long-withheld secret ingredient to his famous "secret ingredient soup" is "nothing", explaining that "to make something special you just have to believe it is". Po realizes that this is the message of the Dragon Scroll, and goes back to confront Tai Lung before he is able to kill Shifu.
Po becomes a formidable challenge for Tai Lung, frustrating him with confusing fighting techniques on top of a physique that renders him immune to Tai Lung's dangerous nerve strikes. Tai Lung momentarily bests Po and retrieves the scroll, but is unable to understand or accept its symbolic meaning. Eventually, Po defeats Tai Lung in combat before using the mysterious Wuxi Finger Hold to vanquish him. Po is praised by the Valley of Peace and earns the respect of the Furious Five, who fully acknowledge him as a true kung fu master. Po then finds Shifu, who finally attains inner peace with the valley safe once more.
- Shenzi, Banzai, and Ed guest star and work for Tai Lung in both versions of this film.
- Stan Marsh, Kyle Broflovski, Eric Cartman, Kenny McCormick, and Mulan will be guest allies in Yakko Warner's upcoming remake version of this film.
- Mushu originally guest starred in LionKingRulezAgain1's original version of this film, but due to his guest appearance on Pooh's Adventures of Kung Fu Panda: Legends of Awesomeness and the character being a future member of The 100 Acre Avatar League, he was switched into the rest of the Winnie the Pooh/Kung Fu Panda franchise (including Daniel Esposito's upcoming remake version of Pooh's Adventures of Kung Fu Panda) and replaced with Mulan (another character from the film of the same name) for Yakko Warner's upcoming remake version.
- In the epilogue, Nala finds Simba, Timon, and Pumbaa and she joins the three on their adventures. A flashback in Simba, Timon, and Pumbaa's Adventures of Mulan foreshadowed this. After this movie, the team becomes a foursome.
- LionKingRulezAgain1's original version was a PAL film with NTSC bits from The Lion King films and Mulan. However, Yakko Warner's upcoming remake version will be an NTSC film with NTSC bits from The Lion King films, South Park: Bigger, Longer & Uncut, and Mulan 1 and 2.
- Both Mulan and Kung Fu Panda takes place on China.
- Simba, Timon, and Pumbaa will face Tai Lung again Simba, Timon, and Pumbaa's Adventures of Quest for Camelot.
- Both The Lion King and Kung Fu Panda featured music scores composed by Hans Zimmer.