NOTE: This spoiler was sent in by Roman.

The movie starts with Zohan walking down a beach, on vacation from his work at Mossad, as an Israeli Counter-Terrorism agent.  He is interrupted from his nude fish cooking session by Mossad, who take him back to base to brief him on the recent reappearance of Zohan’s mortal enemy, a Palestinian agent named the Phantom, who was recently seen at a Hackey Sack tournament.  Mossad explains that they traded the Phantom, who was caught by Zohan months earlier, for two Israeli agents, and a spy to be named later.  Zohan says that this is a terrible trade, because any spy that gets caught can't be any good and isn't worth the Phantom.  Mossad has intel on his whereabouts, and is planning a huge attack on the building, which Zohan believes is meant to guilt him going in by himself since he's their best agent, and he doesn't want to see any of their men killed. 

The night before the mission, Zohan is gearing up, and then takes out his 1980s Paul Mitchell hairstyle book, and flips through the pages, dreaming he is cutting these styles.  He then has dinner with his parents, confessing to them that he wants to leave Mossad to escape all the hate and fighting between the Israelis and Palestinians so he can go to NYC and become a hair stylist, much to their distaste. 

Zohan takes two agents as lookouts, and proceeds to beat the crap out of all the Phantom's men, and then confronts the Phantom himself.  The Phantom escapes, runs through town, and attempts to flee via jet ski, but Zohan swims after him (dolphin style), catches up to him and disables the jet ski.  The Phantom grabs a kayak oar from a nearby boater and tries to beat Zohan with it, and Zohan explains that he feels no pain.  The two argue over who really doesn't feel pain, and the Phantom fishes a piranha out of the water and puts it on his jugular.  Zohan then takes it and places it down his pants, which impresses the Phantom.  The Phantom whips out a grenade, and the two play ping-pong with it.  Zohan lobs it in the air, and it explodes in the water.  The Phantom thinks he’s killed the Zohan, who left his swim trunks as a decoy.

The movie then cuts to Zohan hiding in a dog crate on his way to New York, where he styles his own hair (the Avalon) as well as the two dogs he’s traveling with. 

In New York, he takes a cab (driven by a Jamaican Chris Rock) to Paul Mitchell’s to get a job styling hair.  He is promptly laughed out.  After leaving, he is witness to a car accident where a man hits an armored car after swerving to avoid Michael (Nick Swardson) who was riding a bike.  The man threatens Mike, and Zohan comes to his rescue, beating the crap out of the aggressor.   Zohan is talking to Mike afterwards, but recognizes a Palestinian cab driver named Salim (Rob Schneider) that he once encountered, and to avoid confrontation, puts Mike on his shoulders and runs all the way to his place. 

Mike’s mother feeds Zohan, who tells her that he’s not Israeli, but “half Australian and half Mt. Everest.”  Zohan then sleeps with Mike’s mom to repay her for her kindness (much to Mike’s horror as he walks in on them).   In order to make it up to Mike, Zohan takes him to a disco to help him pick up chicks. 

At the disco, a fellow Israeli named Oori, who idolizes the Zohan, recognizes him and realizes that he faked his death.  He offers him a job at his electronics shop, which Zohan declines. 

The next day Zohan goes from salon to salon looking for work, after many failed attempts, he goes back to the electronics store, where Oori explains to him that all of the workers there were former agents who came to America to chase their various dreams, but ended up getting sucked into a lifetime of working at “Going Out of Business.”   Oori refuses Zohan’s request for a job, and shows him the Palestinian salon across the street.  Zohan initially refuses on principle, but eventually goes in applying for a job.  Initially, as he has no experience, the shop owner Dalia tells him he can sweep up the hair for no pay, as they are broke from the landlord raising the rent.  We find out that Walbridge, the property owner, is trying to get all his tenants evicted to they can demolish the Israeli/Palestinian neighborhood and build an indoor Walbridge mall, complete with a 300’ tall rollercoaster.

Zohan takes his hair-sweeping job a little too seriously; taking extreme measures to make sure not a single hair touches the floor.  After a number of weeks, one of Dalia’s stylists quits, and Dalia is forced to let Zohan style a customer’s hair.  He proceeds to wash the older woman’s hair, very sensually, bangs the hell out of her in the back room, and then styles her hair, which in reality looks pretty good. 

Word spreads of Zohan’s talents, and soon a line of older women forms out the door of the salon.  Zohan styles and sleeps with all of his customers, earning enough money for Dalia to pay the ridiculously high rent to Walbridge.   Despite the fact she is Palestinian, Zohan finds himself falling in love with Dalia, after realizing that he can’t get it up to anyone but her anymore. 

The two go on a picnic, where Dalia tells Zohan that she left Palestine to escape all the fighting, and that in America they can live in peace.   One day, Salim notices Zohan after dropping off two old ladies at the salon, and notifies his Palestinian cohorts.  They plot to take down Zohan so they can be heroes, much like the Phantom, who has grown famous for killing Zohan.   They eventually notify the Phantom that Zohan is still alive, and he comes to New York to kill him, under the guise of going to see a Hackey Sack tournament (Israel v. Palestine). 

Oori notifies Zohan that the Phantom is coming to kill him, and Zohan realizes he must confront the Phantom, but not before confessing to Mike and his mom, and then later Dalia, of who he really is.  She says that family pressure is keeping her from being with him, and he leaves, heading to the hackey sack tourney.

Meanwhile, we find out that Walbridge hired some rednecks to pretend to be Palestinians and Israelis and sabotage all the businesses.  The idea was that they’d come back to their ruined businesses after the hackey sack tourney and blame the other, getting into a street battle and kill each other. 

At the hacky sack tourney, Mariah Carey sings the national anthem, retires to her dressing room, and the Phantom follows her.  Zohan confronts him in the dressing room, and tells him that he wants peace.   He gets interrupted by Mike, who is working the neighborhood watch with Kevin Nealon, calling him to tell him that all of the stores in the Israeli/Palestinian neighborhood are being attacked by the rednecks.  Zohan and the Phantom head over to help, and get there in time to see the Israelis and Palestinians accusing each other of the sabotage.   The Phantom runs inside a burning Palestinian building to fight the fire (with punches and kicks) and save the business.  It’s clear that the Phantom is no match for the fire, and Zohan saves him by putting out the fire with a large tub of hummus.  The Phantom wants to know why Zohan saved him, and Zohan explains that he wants peace.   Dalia comes in, and we find out that she’s the Phantom’s sister.  

Walbridge’s last redneck mercenary threatens to blow up the neighborhood, and Zohan and Phantom decide to team up to defeat him.  On the way to fight the redneck, the Phantom confesses that he always wanted to come to America to open up a shoe store, which Zohan can relate to, and it appears the two become friends, especially after Phantom gives Zohan a pair of shoes that are both comfortable and useful in kicking ass.  The two defeat the redneck by using “the Noise,” which is created when the both of them sing.   Walbridge rides in and his girlfriend’s perfect breasts are ruined by “the Noise,” which drives him mad as he’s being arrested for the plot to destroy the neighborhood.   The Phantom gets a little carried away with the Noise, which blows up the rest of the block.

Several months later, the neighborhood is rebuilt into the Peace & Brotherhood Fire Insurance Mall, where the Phantom has his own shoe store, and Zohan has his own hair salon with his new wife Dalia.