In 1993, professional basketball player Michael Jordan announces his retirement from the sport to follow his late father's career as a baseball player. However, it becomes evident that he is not as skilled in baseball as he was in basketball. Jordan is assigned a publicist, the bumbling Stan Podolak, to make his new career less bumpy. Elsewhere, in outer space, an intergalactic amusement park called Moron Mountain faces dwindling popularity, so its owner, Mr. Swackhammer, sends his diminutive minions, the Nerdlucks, to capture the Looney Tunes as new entertainment. The Looney Tunes live in an animated world hidden in the center of the Earth, but are unable to listen to the Nerdlucks' threats and challenge them to a game of basketball.
The Nerdlucks steal the talents of professional basketball players Charles Barkley, Shawn Bradley, Patrick Ewing, Larry Johnson, and Muggsy Bogues, leaving them incapable of playing. The Nerdlucks absorb the talent, transforming into the gigantic "Monstars" who easily intimidate the Looney Tunes. While playing golf with Bill Murray, Larry Bird, and Stan, Jordan is sucked down a hole and is recruited by Bugs Bunny to help the Tunes win against the Monstars. Jordan at first refuses, saying he does not play basketball anymore, but changes his decision after he is humiliated by the Monstars when they squash him into the shape of a basketball and bounce him around like one. Bugs then sends Daffy Duck to his house to retrieve his basketball gear. The two have a difficult time obtaining the clothes due to the interruption of Jordan's pet dog, but his children help them out.
Meanwhile, Stan has been digging out the golf hole to find Jordan, but spots Bugs and Daffy leap down another one and pursues them, reuniting with Jordan in the Tunes' world and joins the Tune Squad. Another new recruit is Lola Bunny, a skilled basketball player whom Bugs falls in love with. The day of the match arrives, but the first half is dominated by the Monstars, leaving the Looney Tunes unconfident. Stan overhears a conversation between the Monstars and Swackhammer, learning of how they gained their talent and informs Jordan. Bugs and Jordan convince the rest of the Tune Squad to fight back, and the first quarter of the second half allows the Tunes to catch up using old school gags and Acme weaponry. Swackhammer decides he wants Jordan as a new attraction instead, and makes an agreement with him that he will become an attraction if he loses the match, sparing the Looney Tunes.
To ensure his victory, Swackhammer has the Monstars play dirty and injure all of the Tune Squad until only Jordan, Bugs, Daffy, Lola, and Stan are left. Stan becomes the fifth player and manages to score, but is literally flattened by the Monstars and is removed from the court to be inflated. The referee, Marvin the Martian, informs Jordan unless the team gets a fifth player, then they'll forfeit the game. Bill Murray appears and volunteers to be the team's fifth member. In the final seconds of the game, Jordan gains the ball and manages to use cartoon physics to extend his arm and score the winning points. Murray retires from the sport, and the Monstars blast Swackhammer to the Moon in a rocket when Jordan makes them realize that they do not have to take his abuse anymore. Jordan convinces them to give up the stolen talent, and the Nerdlucks are welcomed to stay with the Looney Tunes.
Jordan and a recovered Stan return to the surface, the Nerdlucks dropping them off at Jordan's next baseball game. Later on, the two visit the incapacitated basketball players and return their talent. The players invite Jordan to a three-on-three match but when he declines, they question his loss of talent. In a move mirroring his actual comeback in 1995, Jordan returns to the Chicago Bulls to reprise his basketball career.
- The film takes place before Winnie the Pooh vs The Mummy (1999).