NOTE: This spoiler was sent in by Marcus.
The film begins with Po (Jack Black) narrating about a legendary warrior who traveled the land in search of foes. Po is talking about himself, and he goes to a restaurant to eat some food. He meets some foes and they kung-fu fight, with Po displaying his awesome fighting abilities that are so good, they make his enemies go blind. He meets up with the greatest warriors in all the land and they are about to fight against an army of demons when Po wakes up. It’s was just a dream, and it’s clearly evident that he loves martial arts. He wakes up to hear his father telling him that he’s going to be late for work. Po rushes downstairs and is greeted by his father, who runs a restaurant serving noodles. While cooking, his father asks him what he was dreaming about, and Po (afraid of telling his father about his kung-fu aspirations) says that he was dreaming about noodles. This pleases his father, who says that he was waiting for him to have the noodle dream so that he can tell him the secret ingredient for his secret ingredient soup, and then Po will be able to take over the family restaurant. He shoves a bunch of food onto Po’s arms and tells him to serve the customers.
Meanwhile, Shifu (Dustin Hoffman) plays a flute on top of a nearby mountain. He is suddenly attacked by Tigress (Angelina Jolie), Monkey (Jackie Chan), Mantis (Seth Rogen), Viper (Lucy Liu), and Crane (David Cross) aka the Furious Five. They are his martial arts students, and Shifu is disappointed that they have failed to defeat him. While he gives out pointers, Zeng (Dan Fogler) comes up and tells Shifu that Master Oogway wants to see him. Shifu enters the dojo and asks Oogway (Randall Duk Kim), who’s a turtle, if anything’s wrong. As Oogway slowly blows out the candles surrounding the room, an impatient Shifu blows them all out using a swift move. Oogway says that he’s had a vision where the villainous Tai Lung will return. Shifu says that it’s impossible, since Tai Lung is in prison, but Oogway says that nothing is impossible. Shifu tells Zeng to go to the prison and make sure the guards double up all the protection. Shifu gets all worked up over the possibility of Tai Lung’s escape, but Oogway tells him to calm down. He says that it’s ready for the dragon scroll to be handed away and the destiny fulfilled. Shifu asks him who’s worthy enough to learn the secret to limitless power and become the dragon warrior, but Oogway says that he doesn’t know.
Po awkwardly serves the customers in his restaurant when he learns that Master Oogway is going to choose a dragon warrior that day. He urges everyone to rush to the palace, since they’ve been waiting a thousand years for this day to come. Before he leaves, Po’s father makes him bring a food cart so that he can sell food at the palace, since everyone’s going to be there. Po struggles endlessly to push the food cart up the steps to the palace, and after a lot of time has passed he sees that he hasn’t made it to ten steps. Po ditches the food cart and runs up the steps. A celebration is held at the palace, and Oogway tells Shifu that whoever he chooses will not only bring peace to the valley, but to Shifu himself. By the time Po gets to the top of the palace, the tournament begins. The doors of the main gate close before Po can make it inside, and the Furious Five demonstrate their kung-fu skills. Po tries endlessly to get in, but fails each time. Oogway senses that the dragon warrior is amongst them, and he prepares to choose who it will be. Po is determined not to miss the announcement, and so he rigs a chair with numerous fireworks and lights it up so that he can make it over the door. Po’s father comes up to the palace and asks him what he’s doing. Po finally tells his father that he doesn’t dream of noodles, and as he proclaims his love for kung-fu the fireworks chair fails to do anything. Po is ready to go back to the restaurant with his father when the fireworks shoot Po across the outside wall and fire him way up into the sky. Po is ecstatic, but then comes crashing down right in the middle of the palace courtyard. When he wakes up, he sees Oogway choose him as the next dragon warrior. Shifu can’t believe it, since Po is too big and tells Oogway that he made a mistake. Oogway says that there are no mistakes, and they watch as the villagers struggle to lift Po above their shoulders.
Meanwhile, Zeng makes it to the prison and gives Commander Vachir (Michael Clarke Duncan) the message to double the security. Vachir and his rhino guards maintain that escape from the prison is impossible, since there is only one way out and there are a thousand guards to guard their only prisoner. Vachir smacks Zeng’s back as he looks at his prison, and then he takes Zeng down to see Tai Lung. They make it to the bottom of the prison, where Tai Lung (Ian McShane) is completely secured and archers keep watch over him. Zeng, incredibly intimidated, says that he’ll go back to Oogway and tell him that everything’s under control. After they leave, one of Zeng’s feathers drops down in front of Tai Lung, who snatches it. Back at the palace, Po is dumped inside and left alone in the sacred hall of warriors. Po gushes over all the armor and weapons displayed. Shifu enters and voices his disapproval over Po being the dragon warrior. He says that he’s too fat and puts him in a deadly finger-hold. Shifu says that by the time he’s finished with him, he’ll wish that Oogway never chose him. They enter the main training room, where the Furious Five are hard at work going through all the rigorous exercises. Shifu tells Po that his training will being immediately, but Po prefers to start at the beginner’s level instead. Shifu has Po start off with punching a bag that is used to train children while the Furious Five watch. Po at first weakly punches the bag, and when he punches harder it comes back and knocks a tooth out. Po is knocked into the main training area and receives the beating of a lifetime before being set on fire.
Later on, the Furious Five all disagree with Oogway’s decision and make fun of Po while, unknown to them, Po overhears. Po tries to sneak his way through the palace at night, but every step he makes causes the boards to creak. He stumbles into Crane’s room and says that he’s a big fan of the Furious Five. Crane tells him that he doesn’t belong there. Po says that he knows, but Crane means that he doesn’t belong in his room (and he wants him to leave so that he can sleep). Po leaves and runs into Tigress, who tells him that he doesn’t belong there at the palace since he’s a disgrace to kung-fu. She tells him that if he has any respect for them, he’ll be gone by morning. Sad, Po goes by himself to the sacred peach tree of infinite wisdom and eats the peaches. Oogway comes across him and asks him why he’s upset. Po says that he sucks and the Furious Five hate him. Oogway gives him some words of wisdom to encourage him to stay and then leaves. Back at the prison, Tai Lung uses Zeng’s feather to unlock himself from all the devices holding him down and uses his great kung-fu skills to defeat all the guards and escape. He then has Zeng fly back to Oogway to tell him that the real dragon warrior has arrived.
The next morning, Shifu wakes everyone up to report for training. The Furious Five are all present, but Po is not. Shifu sees his empty bed and figures that he has quit. When they get to the training grounds, they are all surprised to see Po trying to do the splits. It turns out though that Po got stuck while stretching, and so Crane has to help him get free. Shifu has Po resume his training, and he spends all day being beaten by each member of the Furious Five. Shifu is the last to fight against Po, and he mops the floor with him. He ends the fight by sending Po crashing through the front gate and down the extremely long stairs. Later on, Po tries some acupuncture therapy with Viper and Mantis but it proves more painful than he realized. Tigress walks in and talks about Shifu’s past with Tai Lung. Tai Lung was abandoned by his parents outside the gate, and so Shifu brought him in and raised him as a son. Tai Lung showed talent in kung-fu, and so Shifu trained him as a student. Tai Lung could never have enough training and he wanted the dragon scroll so that he could become the dragon warrior, but Oogway saw darkness in his heart and refused. Tai Lung went on a rampage across the valley and tried to take the scroll by force, but Shifu fought against him. He couldn’t bear to hurt his own son, and so Oogway knocked Tai Lung out. Shifu has never loved anyone as much as he loved Tai Lung before he went evil.
While Shifu meditates, Zeng comes back to the palace with the bad news of Tai Lung’s escape. Shifu rushes off to tell Oogway while he meditates at the peach tree, but he’s not worried since he has confidence in Po. He tells Shifu to guide Po and to believe in him. Oogway then gives Shifu his staff and says that his time has come. The leaves from the tree sweep Oogway into the afterlife, leaving Shifu as the new master. Po makes the Furious Five some food from his restaurant and they all love it, except for Tigress (who refuses to eat it and instead sticks to her master diet). Po imitates Shifu and the Furious Five all laugh when Shifu enters from behind. He tells them that Tai Lung has escaped to come for the scroll, and it’s up to Po to stop him. Feeling inadequate, Po says that Oogway can defeat him since he did it before, but Shifu tells them that he has passed away. Tigress wants the Furious Five to defeat Tai Lung, since that’s what they’ve been training for, but Shifu maintains that it’s Po’s destiny to defeat him. He then sees that Po is running away, scared out of his mind. Shifu catches up to him and refuses to allow him to leave the palace. He then asks him why he didn’t run away before, since Po knew that Shifu was trying to get rid of him from the start. Po says that he couldn’t stand being his dull self, and he thought that Shifu would be able to change him into the great dragon warrior. Shifu says that he can still change him, but when he’s asked how he truthfully says that he doesn’t know. Shifu steps aside and walks back to the palace.
Tigress, watching from above, jumps from the top of the palace and jumps from rooftop to rooftop. The other members of the Furious Five catch up to her and join her to defeat Tai Lung. The next morning, Shifu hears a bunch of ruckus while meditating. He enters the kitchen to see Po practicing his kung-fu while eating. Po explains that he eats when he gets upset, but Shifu says that he doesn’t need to explain. He just thought he was Monkey, since he hides his cookies on the top shelf. Shifu turns to leave when he hears Po making his way to the top shelf. Shifu turns around to see that Po has made a perfect split while supporting himself to get the cookies. However, due to his weight, Po ends up collapsing on the shelves. Shifu takes Po out on a hike to visit the pool of sacred tears, which is the birthplace of kung-fu. Shifu sets out to train Po in a different way than his previous students, since when Po concentrates on kung-fu he sucks. He instead motivates Po with food, since he’s better with kung-fu when he wants to eat. We see through a montage that Po gets progressively better with his training. Eventually, Shifu has Po sit down to eat some dumplings, saying he’s free to eat. However, each time Po tries to eat Shifu snatches the dumplings away and eats it himself. Shifu and Po duel over the last dumpling and Po manages to win it. At the end though, he gives it to Shifu, saying that he’s not hungry (since he’s not upset).
Elsewhere, the Furious Five encounter Tai Lung on a bridge. He learns that Po is the dragon warrior and is pleased that there is finally a worthy opponent to take part in a legendary battle with. Tigress fights Tai Lung while the others hold the bridge to keep it from falling apart. Tigress is strangled by Tai Lung and falls off the bridge. Crane flies down and saves her while Viper fights Tai Lung. She gets overtaken by Tai Lung, and so Monkey steps in to fight, leaving Mantis to hold the bridge together by himself. Tigress, Monkey, Viper, and Crane all attack Tai Lung together. The bridge collapses, and it appears as though Tai Lung falls to his death. However, he uses the other half of the bridge to swing himself across to the side where the Furious Five are and defeats them. As Po and Shifu return to the palace, Crane weakly flies back with the others. He says that they were no match against Tai Lung’s nerve attacks. Shifu undoes the damage done to the Furious Five and tells Po he must defeat Tai Lung. Shifu gives Po the dragon scroll and tells him to fulfill his destiny by reading it. Po is overjoyed to receive the scroll, but has trouble opening it. Shifu opens it for him and Po peeks inside to read the scroll…but finds that it’s blank.
Shifu is confused, but tells the Furious Five and Po to evacuate the villagers and protect them. He will fight Tai Lung himself. Po says that he’ll die if he does, but Shifu doesn’t care. The Furious Five evacuate the villagers as Po returns to his restaurant. His father is pleased to have him back and immediately puts his apron around Po so that he can resume work. As Po carries their cart, he becomes sad and sits down. To cheer him up, his father tells him the secret ingredient to his secret ingredient soup nothing. You don’t have to add something special if you believe it’s special. Po looks at the scroll again, sees his own reflection in it, and becomes inspired. Tai Lung shows up at the palace and finds Shifu waiting to fight him. While they fight, Tai Lung says that it was his destiny to become the dragon warrior. Tai Lung pins Shifu down with Oogway’s staff, but it breaks in half. They jump through the roof of the palace and fight in mid-air. Tai Lung then savagely beats Shifu with his nerve attacks. Defeated, Shifu tells him that he was proud of him from the moment he saw him, and it was his pride that blinded him from seeing what Tai Lung was becoming. He says that he’s sorry, but Tai Lung grabs him and tells him that the only thing he wants is the scroll. He becomes enraged when he sees that it’s gone. He’s about to kill Shifu when Po bursts into the palace. He pauses to catch his breathe from the stairs, and then holds up the scroll, introducing himself as the dragon warrior.
Tai Lung tackles Po down the palace steps and they fall into the village. They fight all over for control of the scroll, but Po is able to keep it from him. Eventually, the scroll becomes stuck on a high building. Po visualizes it as a cookie and jumps up to get it, but Tai Lung destroys the building. As they fall, Tai Lung tackles Po so hard into the ground that he creates a crater. Tai Lung finally gets the scroll and opens it, but gets filled with rage when he sees that it’s empty. He beats on Po using his nerve attacks, but he doesn’t feel the effects of it due to his large belly. Po uses his belly to hit Tai Lung up into the sky and create a large hole in the crater when he lands. He can’t believe that he’s been defeated by a panda, and Po uses the finger-hold on him. Po uses his pinky finger to cause Tai Lung to explode. The villagers come back and see that Po has defeated Tai Lung. They all cheer and try to lift Po above their shoulders, but can’t due to his size. Po’s father is proud that his son is a kung-fu master and embraces him. The Furious Five bow down to Po and call him master, which reminds Po of Shifu. Po runs back up the stairs of the palace and finds that Shifu is still alive. Shifu thanks Po for bringing peace to the valley and to him. Shifu closes his eyes and appears to die, but he turns out to be at peace with himself and is just relaxing.
The film ends with Po laying down next to Shifu and asking him if he wants to get something to eat, which Shifu replies “yeah”.