NOTE: This spoiler was sent in by Marcus.

The film begins with Olive Hoober (Abigail Breslin) watching a taped beauty pageant, where the winner is shocked to hear that she won. Olive mimics the winner's shocked expression. Her father Richard (Greg Kinnear) gives a self-help seminar about how to be a winner in nine steps to a small classroom with very few people in it. Dwayne (Paul Dano) works out in his room. Grandpa (Alan Arkin), Richard's father who lives with the family, snorts heroin in the bathroom. Sheryl (Toni Collette) drives while smoking a cigarette. She's on her way to the hospital, where her brother Frank (Steve Carrell) is. Frank tried to kill himself. He can't stay at the hospital due to their insurance and the doctor tells Sheryl to watch him closely (while also informing her of hiding medication and sharp objects).

Sheryl drives Frank to her home while Frank is not in the talking mood. Since Frank cannot be by himself, Sheryl decided that Frank will share Dwayne's room. Dwayne is not exactly thrilled and goes to the dining room table to read a novel by Friedrich Nitsche while Frank sits on his bed. Sheryl gets Dwayne to set the table as Richard arrives home. Richard hears a phone message about Little Miss Sunshine, but ignores it and continues unloading their dinner (fast-food chicken). Sheryl calls out for Grandpa and Olive to come eat dinner, but their busy in the other room working on Olive's routine. She gets Dwayne to get Frank for dinner, and Dwayne signals that it's time to eat. Dwayne can talk, but has decided not to because of Nitsche. Everyone comes to the dinner table, where Frank learns more about Dwayne's vow of silence. He wants to be a pilot for the Navy, and has decided to stay silent until he goes to flying school. It's been 9 months since he's talked. He writes down a note to Frank - "I hate everyone". Frank asks if that includes his family, and Dwayne underlines "everyone". We also find out that Dwayne is Sheryl's son from a previous marriage. Grandpa complains about the chicken, and how sick he's been of eating chicken all the time.

Olive asks Frank what happened to his wrists, and Frank says that he had an accident. Sheryl, much to Richard's dissatisfaction, tells Olive the truth. When Olive asks why he tried to kill himself, Richard doesn't want Frank to answer but he does anyways. It was for a variety of reasons, though primarily it was because he fell in love with one of his students who didn't love him back (the gay student is in love with another man), got fired from his job, and got evicted from his home. Richard calls Frank a loser and tells Olive that Frank is sick. The subject changes when Richard mentions a telephone message about Little Miss Sunshine (a beauty pageant for children). Olive was a second place winner in a local pageant, but the winner was found out to be taking diet pills (so Olive is the winner by default, and she has a chance at competing for Little Miss Sunshine). Olive screams in delight and runs all over the house. Sheryl calls the person who left them the message and gets the details about the pageant. It's being held in Redondo Beach, California and is in a couple of days (the Hoovers are in Albuquerque, New Mexico). They can't fly because they're tight for cash, Richard doesn't want to go because he has an important business proposition that could be his big break, Dwayne doesn't want to go at all, Frank can't stay by himself or stay behind with Dwayne, Grandpa definitely wants to go, and Sheryl can't take her car because it won't fit everyone. It's finally settled that they will all drive to California in their VW bus (Richard will drive since Sheryl can't drive stick). However, Richard tells Olive that there's no sense in them driving out there if she doesn't think she can win. He asks her if she's a winner, and she is confident when replying "yes". They hug and he officially announces to her that they're going to California. That night, Dwayne writes to Frank "please don't kill yourself tonight" before they go to bed, and Dwayne also writes "welcome to hell".

The Hoovers drive off in their VW bus the next day for California. While Olive listens to her headphones, Grandpa tells Dwayne that he needs to have sex with as many women as he can and shouldn't limit himself to just one person. Since he's so young, he needs to start craching with the ladies and get some of the "young stuff" because before he knows it, he'll be 18 (he's 15). Richard doesn't think that it's a great discussion and tries to settle his father down while also telling him to watch his language in front of the kids. We find out that the whole family knows about Grandpa taking heroin, and he says that he should since he's old (but tells Dwayne that he shouldn't because he's so young and it'll mess him up). Grandpa makes mention that he still has Nazi bullets in his ass when Olive takes off her headphones and asks them what they're talking about. Grandpa just says politics and she puts her headphones on again. Richard tries to call Stan Grossman, the man who's helping him with his business dead, but the phone connection is bad. He then explains his business deal to Frank - he's going to write a book and give an inspirational seminar tour. Stan is going to get him the deal. No one cares about Richard's deal, and when Frank uses sarcasm Richard says "sarcasm is the refuge of losers". Frank uses more sarcasm to spite Richard and they argue while Sheryl breaks it up.

They stop at a diner and order food. Olive's parents tell her that she can only order four dollars worth of food, so she orders something in addition to ice cream. Richard tells Olive that ice cream comes from cows and that it makes people fat. He then asks her if beauty pageant winners are fat, and Olive says no. Sheryl gets after Richard for saying that, and tells Olive that they love her, fat or skinny. Because of Richard's comments, Olive doesn't want to eat the ice cream anymore. She asks if anyone else will eat it for her. Grandpa, Frank, and Dwayne all eat some to cheer Olive up while Grandpa says that he feels sorry for whoever doesn't eat ice cream. Olive, cheerful again, makes them stop and eats it herself. Dwayne shoots a straw cover at Richard's head in defiance.

Sheryl wants to learn how to drive stick, and so she makes Richard teach her in the parking lot. She is horrible at it and can't seem to shift gears. When Richard tries, it turns out he can't shift either. They go to a mechanic, who tells them that something's wrong with the shifting and they need to order a new part. Since it's out of the question to wait for it, the Hoovers decide to push the van until Richard can start the engine, and then one-by-one they all jump into the moving van. Eventually, Richard gets a call from Stan but their call is broken up. A little desperate, Richard pulls over and calls Stan from a pay phone. It turns out that the deal fell through, and is not going to happen. Richard is clearly upset. Olive exits the van to practice her routine. Dwayne goes outside to do push-ups. Sheryl goes to the bathroom. Grandpa has Frank go inside the convenience store to buy him some dirty porn. He also gives Frank extra money to buy some gay porno for himself.

While in the store, Frank runs into the student he fell in love with. He puts his arms in back of himself to hide the bandages on his arms. The student is traveling with his lover somewhere and says that he heard about Frank getting fired. Franks says that he quit and is very happy now. Things get awkward when the cashier asks for Frank's money for the dirty porn. The student takes off with his lover while Frank watches from the window, very depressed. He gives Grandpa his porn and becomes quiet. Dwayne gets back in the van. Richard tells Sheryl that the deal won't happen, and Sheryl becomes upset because they were counting on the money. Grandpa can that everyone's upset. Richard tells everyone to get in the van and they drive off after a good push from everyone.

They get back on the highway and everyone is silent. Dwayne looks around, and then writes down "where's Olive?", and they realize that they forgot her. Olive is still back at the store, unsure of what to do. They speed back to the store, but can't slow down or stop because of the damaged shifting. Frank reaches out and Olive jumps into the speeding van. By night, they drive to a motel where they get three rooms (Richard and Sheryl, Grandpa and Olive, Frank and Dwayne). Grandpa helps Olive with her routine before they go to bed (they practice growling). When it's time for bed, Olive asks Grandpa if he think she's pretty. He tells her that she's the most beautiful girl in the world, and that he's madly in love with her not because of her brains or personality. Olive is scared that she'll lose, and that her dad won't love her because she'll be a loser. Grandpa tells her that a loser is someone who quits because they're too afraid of not winning. He reassures her that they all love her and are proud of her regardless if she wins. He tucks her in for the night and takes some more heroin in the bathroom. Richard and Sheryl argue about him not getting the deal. Richard says that Stan told him it would happen, and Sheryl says that they don't have enough money for the trip and are bankrupt. They argue so loud that Dwayne and Frank can hear them in their room. Frank tries to take Dwayne's mind off it by turning on the TV (which has President Bush talking about Rumsfeld), but Dwayne turns it off and listens to the argument. He smiles on his bed when he hears his mother curse. Richard, fed-up, puts back on his shoes and tells Sheryl that he's going to fix this. He tries to start up the van, but he can't get enough momentum so he walks over to some bikers to ask for help.

We next see Richard driving one of the bikes to a city 22 miles away, where Stan is. He drives to the hotel Stan's staying at and tries to reach him. When he calls his cell phone, he can actually hear it close-by. He looks around and finds Stan (Brian Cranston), who sees who the caller is but ignores it to talk with other people. Richard makes himself known, and they go outside to the pool area to talk. Richard says that he told him it was a done deal, and Stan defends himself by saying that he tried extremely hard for people to back up Richard and his book/tour. The fact is that the problem is Richard, and that people simply don't know him (therefore they don't care about him). Richard, trying to keep face, says that this relates to the nine steps of being a winner and says that he won't give up. He drives back to the motel and sleeps.

The next morning, Olive wakes up her parents and tells them that Grandpa won't wake up. An ambulance takes Grandpa away while the family follows in their bus. Olive asks if anyone wants to take an eye test, but Sheryl calls for a family meeting in the waiting room. She tells her kids that god may want to take Grandpa, and that they should be prepared for that. She says that it's important that they all love each other, because they're family. She breaks down while Frank comforts her. Dwayne writes for Olive to hug mom, and she does. The doctor come in the room and tells them that Grandpa is dead. He took too much heroin and overdosed. He shouts for a woman to help them through the grieving process and tells them that she'll go over important information with them. The lady is rather cold and doesn't care about the family. She gives them paperwork to fill out and tells them that they can contact a local funeral home to take the body. Richard tells her that they already have funeral arrangements in Albuquerque, but she informs them that they'll need a special permit to move the body across state lines. Richard tries to make her understand that they're trying to get to California by 3pm that day, but she says that they can't abandon the body and come back for it. He asks to at least see the corpse with his family.

They go to the hospital room where Grandpa's body is. They are all sad, and Sheryl tells Olive that she'll compete for Little Miss Sunshine next year. Richard is upset about his father's death, but also knows that he would want them to make the pageant. He throws out the paperwork and decides that they are going to continue to California, with Grandpa. He wraps him in the bed sheets and sends Frank with Dwayne outside to catch the corpse from the window. Olive waits outside the room and asks as lookout. Richard puts Grandpa's body out the window and the others take it to the van. Everyone makes it ouside alright without being seen, and they put the body in the trunk. They all push the van and jump in, speeding away. Back on the freeway, they get cut-off by another car and the horn becomes stuck. They get pulled over by a police officer while the horn humorously continues to honk randomly. Richard tells everyone to act normal. The cop orders Richard to step out of the car, and due to Richard's nervousness gets probable cause to search the trunk. Richard, with his hands on the car, yells out that it's not illegal and the cop opens the trunk. The nudie magazines fall out, and the cop brings Richard back and talks about how great the magazines are. Richard agrees, and the cop is willing to let them slide with a warning if they let him keep the porn. The perverted officer, completely oblivious to the corpse in the back, lets Richard keep the gay porn magazine that Frank bought. The officer leaves. Richard gives Frank a dirty look and they continue on their journey.

Olive gives Dwayne an eye test, and she finds that he has 20/20 vision. She gives him a test to see if he's color-blind, showing him a colored square with another colored object inside it. Dwayne can't see the other object, and Frank truthfully tells him that he's color-blind, and that he can't be a pilot for the Navy because of this. Dwayne gets extremely upset and starts to hit the van. Frank yells for Richard to pull over, who's adamant about making it on time for the pageant. He pulls over though and Dwayne runs outside down a small hill. He breaks down and screams "fuck",  holding his head down and crying. He then tells everyone that they're losers, and points out all their faults. Dwayne tells them to just leave him there, alone. Sheryl, shocked, doesn't know what to do. Frank volunteers to stay behind, but Richard and Sheryl won't let him. Dwayne just needs some time to himself. Richard asks if Olive would talk to him, since they're running out of time for the 3pm deadline. Olive makes her way down the hill to where Dwayne is and puts her arm around his shoulders, while also resting her head on his right shoulder. Dwayne cracks and tells them he'll go with them. He apologizes for what he said, and Sheryl hugs him. They get back into the car and speed off.

They have some difficulty finding the exit, but they finally make it to Redondo Beach. They take the wrong exit and move away from the hotel where the pageant is being held. Richard can't turn around because they're still on the freeway. They pull into a parking lot and jump the curb, driving on the sidewalk near the beach towards the hotel. They're determined to make it on time. They speed into the parking lot of the hotel and the car door breaks off when Frank opens it. Frank runs to the hotel's second floor, where the contestans are supposed to sign in. He tells them that they have one more contestant, but Pageant Official Jenkins (Beth Grant) says that they are late by a couple of minutes and refuses to allow them in. Everyone catches up and Richard literally falls on his knees and begs Jenkins to let Olive compete. She still won't budge, but another nearby pageant official allows them to sign in and compete, against Jenkins' wishes.

During this time, Olive also gets to meet Miss California, who autographs a picture of herself. Olive asks her if she eats ice cream, and she tells her that she does (along with her favorite kind). Olive smiles and walks away with her mother. Every contestant is supposed to have a talent act, and Olive's is dancing. She gives her CD to a pageant official, who looks at it with a questionable look on his face. He asks her what track, and she says 12. Turns out Grandpa picked out the CD and song. Richard calls a funeral home and says that Grandpa was asleep for 5 hours in the van when they realized that he died. When the guys come to collect the body, they find the situation bizarre since the corpse is still in the trunk, wrapped in hospital bed sheets. They take the body regardless and give Richard his father's personal affects. Sheryl takes Olive backstage to get her ready. We can see several contestants and their mothers working furiously to have their child be the best (one even sprays something on her daughter to make her look tanned). Olive puts on her outfit, and Richard grabs a seat in the audience while Frank and Dwayne sit outside. Dwayne, still not happy to be there, basically says "fuck pageants" and leaves with Frank tagging along.

The announcer introduces each contestant as they walk on-stage. Sheryl stays backstage while Richard watches the show. All the girls are wearing extravagent clothes, while Olive is just in her bathing suit. She smiles at her father in the audience and does her walk. The announcer sings a song and the pageant gets underway. Each girl does their talent act (which ranges from dancing and singing to yodeling). Richard looks worried when one contestant is extremely flexible and does gymnastics all over the stage. During this time, Frank and Dwayne are at the nearby pier. Dwayne wishes that he could just be asleep until he's 18, not experiencing high school and all of his troubles. Dwayne just wants to do what he loves and "fuck everything else". Frank tells him about a not-so-well-known author, who did what he loves and cherished all the troubles he went through. Frank tells Dwayne that if he would be asleep until he's 18, he wouldn't learn more about himself and how to deal with his problems. Dwayne says that even though he's color-blind, he's going to find a way to fly for the Navy. They walk back to the pageant just in time to see yet another girl sing and dance. Disturbed, they exit quickly and Dwayne goes backstage to find Olive.

Sheryl helps Olive get ready for her talent act when Richard and Dwayne find them. They pull Sheryl aside and they both urge her not to let Olive go out there. The other kids are much better than her, and she'll be laughed at. Plus, Dwayne doesn't think much of the pageant officials, along with everyone else. Olive hears some of their conversation and looks a bit hurt. Knowing that they just want to protect Olive, Sheryl doesn't want Olive to give up. She wants Olive to be Olive, and in her eyes she's a beauty queen. Olive's act is coming up, and Sheryl lets Olive know that if she wants to quit, they won't think less of her and are still proud of her. She's already in her costume (tie, jacket, and pants). She looks at herself in the mirror and puts on her top-hat. She's going to go for it, and an impatient pageant official walks her to the stage. The Hoovers wish her good luck  and rush back to the audience to get seats. Before she does her act, Olive grabs the microphone and dedicates her routine to Grandpa, who taught her all her dance moves. The announcer asks "where's your grandfather now?" and Olive replies innocently "in our trunk" while the audience doesn't quite know how to react to that answer.

"Superfreak" plays and Olive does a hilarious striptease dance to the song. She tears off her pants and throws her top-hat at the announcer. Everyone is shocked, some even insulted/disturbed. Several contestants and their mothers rudely leave while Jenkins fumes over the dance routine. Richard, Frank, Sheryl, and Dwayne stand up and try to encourage Olive by clapping to the beat. More people get up and leave, and Jenkins asks Richard what his daughter is going. Richard replies "kicking ass!" and continues to clap. Jenkins orders the announcer to cut Olive off. When he goes back on stage and tries to make her stop dancing, Richard runs up and gets in a scuffle with the announcer. Security breaks it up, but he just asks that they let her finish her act. Jenkins still wants Olive off the stage. Richard then starts to dance to the song with Olive and then Frank runs on stage to dance too. Dwayne and Sheryl shortly follow, and they all dance on stage with Olive to the song. When it's over, the people still left in the audience clap and cheer.

Next, we see the Hoovers in the security office of the hotel. Jenkins is furious at Olive's performance, and the hotel security guard agrees to let them off the hook under the condition that they are banned from entering any more beauty pageants in the state of California. Even though Olive was disqualified and didn't win Little Miss Sunshine, her family congratulates her on her performance. Richard fixes the car door. They happily get back behind their van and push, running inside one by one. They drive off towards the security gate, where Jenkins is, waiting to pass through the security bar. The Hoovers exit through the wrong way, driving through the security bar while Jenkins looks at them shocked.

The end.