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The story begins as we see Scott Brody's dog being kidnapped by cats. We discover that Scott's dad (Jeff Goldblum) is a scientist who works in the basement coming up with a cure for man's allergies to dogs.

The cats think this is a very bad idea and will stop at nothing to sabotage his research. The family dog was actually a special agent, there to protect the Brody household from cats.

The dogs have set up an entire network of spies and agents in the neighborhood, headed up by Butch. After the kidnapping, a new agent is sent to work for Butch but through a series of mix-ups, a normal beagle is sent by mistake. Scott isn't to thrilled with the new beagle and names him "loser" but they call him Lou.

The head cat, Mr. Tinkles, sends in the troops to invade the Brody house. The first are ninja cats who come close but fail. Lou, with the help of Butch and the special agent dogs, defends the house just before the Brody's wake up.

Mr. Tinkles sends out his top russian cat who also comes close by preparing plastic explosives on the basement door but still fails.

Finally, Scott has befriended Lou enough so they play soccer together but the ball is accidentally kicked down the basement stairs, destroying all of his dad's work.

His dad is pissed but then realizes that the mix-up in all the chemicals actually created the correct formula he had been working so hard on.

Tinkles has one last plan. He sends the Brodys tickets to a made up soccer match and when the Brodys arrive at the main gate, they are kidnapped.

Tinkles now has the Brodys and demands the formula as ransom. The Brodys can't believe it when this talking cat reveals his plan to them.

Lou brings the formula to Tinkles owner's tree flocking factory. Tinkles reverses the formula and makes it so ALL people will be allergic to dogs. His plan is to give all the rats and mice in town this formula and they will in turn infect all the people of the world.

Lou and all the special agent dogs make way to the factory and a huge fight begins.

The Brodys escape and the factory blows up.

Lou is pulled from the burning factory and looks to be dead. Scott cries as he tells Lou that he can't die because he's his best friend. To his amazement, Lou wakes up and whispers to him in a human voice, "you're my best friend too."

The movie ends as Tinkles is now living with his owners maid. Throughout the movie she had been having fun dressing him up in "girlie" outfits. Now he is living with her and her sisters who have many new outfits for him to try on.

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Lou's (Tobey Maguire) report is monitored by ninjas
Tinkles (Sean Hayes) addresses the cat battallions