The film opens with the King and Queen (Fiona’s parents) going to see Rumpelstiltskin to find a way to free Fiona from the tower from the first movie. In exchange, they agree to sign over their kingdom to him. But before they sign the contract, they find out that Shrek has already saved Fiona. We are brought back to the present where Rumpelstiltskin is ripping apart a book in a bookstore telling this story, angry that he didn’t get the kingdom. Pinocchio kicks him out of the store after he tries to offer him a deal to make him a real boy. He wishes Shrek was never born.
We cut to Shrek with Fiona and their three children, living a happy and content life in the swamp. Or so it looks at first. But we soon see that it’s the same routine for Shrek day after day with no rest or time to himself. Shrek and the gang go back to Far, Far Away to celebrate their kids’ birthday. All the villagers who used to fear him are now clamoring fans and treat him like a celebrity. After the three little pigs eat the birthday cake and an annoying kid bothers him about doing the ogre roar, he unleashes a mighty roar and smashes the new cake.
Shrek and Fiona go outside to talk. Shrek is angry that he is no longer a real ogre. He wishes his life were how it was before he rescued Fiona. Fiona is hurt and tells him he has everything but Shrek is the only one that can’t see that. Eavesdropping on this conversation nearby is Rumpelstiltskin.
Shrek passes by a fallen over carriage and lifts it to find Rumpelstiltskin. Shrek fixes his carriage. In exchange, Rumpelstiltskin offers Shrek a ride and some drinks. During the ride, Shrek tells him he wishes he could be a real ogre for just one day. Rumpelstiltskin offers him a contract offering him just that. In exchange, Shrek is going have to give up a day. They agree it will be a day from his childhood. Shrek signs the contract and everything around him swirls around and disappears landing him in the middle of the forest. A tour group drives by and they react in fear and crashed. The villagers are afraid of him again as shown in a montage of Shrek scaring villagers and animals.
As Shrek walks through the forest, he notices that the wanted posters are not just pictures of him but pictures of Fiona as well. He runs back to his home in the swamp to find it abandoned. A band of witches fly by the area and see him. They attack, knocking him unconscious and capturing him. He wakes up in a trolley cage being driven by witches and dragged by Donkey. Shrek tries to ask him what is going on but Donkey doesn’t know who Shrek is. He is being taken where every other ogre is taken, to Rumpelstiltskin.
Far, Far Away has become rundown and decrepit except for Rumpelstiltskin’s enormous castle. Inside the castle, it’s like a dance club as Shrek in chains is marched across the dance floor to the throne of Rumpelstiltskin. Pinocchio begs him to be a real boy but he gets dragged away before he can sign the contract. Rumpelstiltskin sees Shrek and thanks him for making everything around him coming true. He reveals that the contract that the King and Queen signed ended up taking away their existence when they signed away the Kingdom to Rumpelstiltskin. He reveals to Shrek that the childhood day that he took away was the day Shrek was born. When the day comes to an end, Shrek will disappear forever. This is a world where Shrek never existed so his children don’t exist. Shrek, in anger, breaks free and steals one of the witch’s broomsticks and escapes with Donkey, against his will.
Shrek and Donkey crash land in the woods somewhere. Shrek stops Donkey from running away. Shrek tries to convince Donkey to trust him but fails. Donkey runs away screaming. Shrek sits alone looking at a little doll from his kids and starts crying. Donkey sees this. Having never seen an ogre cry before, he trusts him. Shrek tells him that he signed a contract with Rumpelstiltskin, which Donkey says you should never have done. Donkey then tells him about the exit clause which used to be guessing Rumpelstiltskin’s name but they don’t do that anymore since everyone knows his name now. Donkey shows Shrek the hidden exit clause in the contract by folding the contract in a certain way. The way to break the contract is to share true love’s kiss. Shrek has to kiss Fiona but doesn’t know where she is so he rushes to the fortress where he rescued her in the first movie. When he gets to the top of the tower, he finds it empty and on the wall a tally of the innumerable days she spent up in that tower.
Shrek finds a napkin that belonged to Fiona. He gives it to Donkey so he can sniff her out. He smells something but his nose just leads him to a plate of waffles. Shrek tries to stop him but Donkey tastes it anyways. It’s a trap that pushes him down a hole. Shrek follows Donkey through it underground. He finds an entire community of ogres. The warrior leader of this group turns out to be Fiona. She doesn’t recognize him. He tries to explain the situation to her but he does it poorly. Before he can continue, witches patrol by their little village.
Rumpelstiltskin has a meeting with the witches. He threatens them with a goblet of water in order to get Shrek before he kisses Fiona. They decide to hire a bounty hunter. Fiona tells her meeting of ogres that Rumpelstiltskin will lead the Ogre Hunt himself. They plan to ambush him now that he’s out of the safety of his castle. Shrek plans to get Fiona to fall in love with him all over again so she will kiss him. When Shrek goes to Fiona’s room, he finds a morbidly obese Puss n’ Boots. He has retired and gone soft. Fiona finds Shrek in her room. Shrek gives her a gift basket in order to woo her. It doesn’t work and she kicks him out.
The bounty hunter Rumpelstiltskin has hired is the Pied Piper. Using his flute, he is able to manipulate anyone, demonstrating by making the witches break dance against their will. Shrek finds out from the other ogres at dinner that the usual romantic gestures won’t work with Fiona and that the only thing she really cares about is getting rid of Rumpelstiltskin. Shrek tries to get closer to Fiona by feigning interest in the armory weapons. They end up sparring and having a good time with each other. Before he can get too close, she snaps out of it and tells him to get ready for the mission. Puss catches up to Shrek telling him that he saw a spark in Fiona that means Shrek is truly Fiona’s true love. Shrek tells Puss that he knows about Fiona’s curse.
At the ambush, they take down the carriage to find it empty. It’s the Pied Piper. Meanwhile, Shrek tells Fiona everything he knows about her including the curse. They start dancing randomly. It’s the Pied Piper forcing the all of the ogres to dance uncontrollably. Donkey and Puss ride down the hill and grab Shrek and Fiona. They try to ride them away from the music but end up falling into the river. On dry land, Fiona tries to go back to her friends but Shrek insists that she kiss him in order to save her friends. She kisses him but it doesn’t work. Nothing happens. Fiona tells him it’s all a big fairy tale and that she got herself out of the tower. She leaves. The kiss doesn’t work because Fiona doesn’t love him. She was never rescued like she was supposed to be.
Rumpelstiltskin takes to the airwaves across all of Far, Far Away and tells the populace that he will give them their wildest dreams in exchange for Shrek and Fiona. Shrek finally realizes that he didn’t realize how perfect he had it until it was all gone. Gingerbread Man tries to collect his bounty from him and tells him about the deal. This gives Shrek an idea. Puss accidentally eats Gingerbread Man. Shrek turns himself in, in order to get the deal of a lifetime. He makes a deal with Rumpelstiltskin to free all the ogres. He keeps Fiona, however, because she’s not all ogre. Rumpelstiltskin keeps them chained in the same room but across the room, relishing his victory.
Donkey, Puss, and the ogres make a plan on how to free Shrek and Fiona. Meanwhile, in the large room that Shrek and Fiona are chained up, Rumpelstiltskin unleashes Dragon. Donkey, Puss, and the ogres break in and cause chaos as they try to save Shrek and Fiona. Donkey and Dragon fall in love all over again but instead of kissing him, the dragon almost eats him. Shrek and Fiona work together to chain up and defeat Dragon. The ogres corner Rumpelstiltskin but he tries to escape on his goose. Shrek lassoes the goose and brings him down to the ground. The ogres have won the battle. Shrek begins to disappear. Shrek tells her all about their life together and their kids as he’s disappearing. He tells her how he’s enjoyed falling in love with her all over again. She kisses Shrek just as he disappears. The sun rises and Fiona is still an ogre, meaning the kiss worked. The world around them begins to break apart and disappear as reality is restored.
We cut back to the birthday party right after Shrek has roared at everyone. Instead of smashing the cake, he rushes over to Fiona and hugs her and gives a great big hug to his kids. Shrek tells Fiona that he thought he was the one that rescued her from the castle but it was really her that rescued him.
During the credits, Shrek and everyone in the movie, including the ogres, have a big party and dance.
You can send in your spoiler to other movies by going here.