The tree that the chipmunks Alvin, Simon, and Theodore live in is cut down and driven to Los Angeles. After JETT Records purchases it as a Christmas tree, the Chipmunks meet the struggling songwriter and composer, David Seville, who has had his latest song rejected by the company's chief executive, Ian Hawke, his former college roommate and best friend, who claims that there is "no sense in writing songs that no one is ever going to sing." Dave also once had a relationship with his next door neighbor, Claire Wilson.

In the process of escaping the JETT building, the Chipmunks hop into a basket of muffins Dave stole from one of Ian's coworkers, and follow him home. Once there, Dave discovers the Chipmunks and kicks them out, only to hear them sing "Only You (And You Alone)." He then makes a deal with them; they sing the songs he writes, and he provides food and shelter for them. Unfortunately, when Dave tries to present the Chipmunks to Ian, they fail to sing to him on account of stage fright. The day worsens as Dave is dismissed as the Chipmunks ruin his job presentation by having drawn on it, thus getting him fired from his job. When Alvin tries to set the mood for Dave's dinner with Claire, things become peculiar, and she rejects Dave after he tells her about the Chipmunks. To make it up to Dave, the Chipmunks go to Ian in an attempt to obtain a record deal.

Once the Chipmunks sing Dave's song to Ian, Ian signs them to the label, and he calls Dave the next day. After a few singles, the Chipmunks become an international success. When Dave expresses concern for their well-being and insists that the Chipmunks are "children" who do not need so much craziness in their lives, Ian convinces the Chipmunks that Dave is holding them back. After a misunderstanding with Dave, they go to live with Ian. They are enchanted with Ian at first, but once they set off on a nationwide coast-to-coast tour, he takes advantage of their naïvete, changing their image and working them constantly. Meanwhile, Dave misses the Chipmunks, and he wishes that they would return. He calls Ian and asks to talk to them, but Ian declines, and then conceals Dave's motives from the Chipmunks, saying that he sent Dave tickets, but that Dave sent them back. Later, the fact that the Chipmunks are becoming worn out is all over the news. Frustrated by what Ian has done to the Chipmunks, Dave decides to take matters himself by infiltrating their concert to reunite with them.

On the night before the big concert that is to transition the coast-to-coast tour into a world tour, a vet explains to Ian that the Chipmunks' voices have worn down due to exhaustion, and suggests that they should take a lengthy rest. Rather than cancel the concert and hand out refunds, Ian advises the Chipmunks to lip sync. With Claire's help, Dave is allowed into the concert, but he is ejected by security. Witnessing the commotion, the Chipmunks realize that they've been tricked, and, deciding that they have had enough of Ian, they stall the concert. Ian locks them in a cage and prepares to take them for the world tour. Dave tries to convince Ian to let the Chipmunks go, but Ian refuses. Ian then leaves in his limo with the Chipmunks, and Dave chases them, but the Chipmunks have already escaped to Dave's car. Dave immediately pulls over and admits that he loves them like his own family. Meanwhile, Ian looks in the cage and is shocked to see that the Chipmunks have replaced themselves with international merchandising dolls.

Later that night, the Chipmunks are fully accepted as part of the family, and they invite Claire over for dinner again. Alvin accidentally creates a short circuit after having difficulty popping the cork of a champagne bottle. Though Dave decides not to say his catchphrase, the short circuit causes a blackout in the kitchen. As a result, Dave can no longer prevent it.

In a mid-credits scene, Ian, now unemployed, tries to make three squirrels sing "Deck the Halls" but fails. After this, a message says, "This film is dedicated to Ross Bagdasarian Sr., who was crazy enough to invent three singing chipmunks nearly 50 years ago."

During a benefit concert in Paris, France, David Seville is seriously injured from a backstage accident, when a cardboard cutout of Alvin sends him flying across the stage. Having to recuperate there, Dave asks his aunt, Jackie, to look after the Chipmunks, Alvin, Simon, and Theodore. Arrangements are also made for them to go to public school at West Eastman High School. After Jackie also has an accident, the Chipmunks are left in the care of Toby, Jackie's grandson.

Meanwhile, Ian Hawke, who is broke and destitute, lives in the basement of JETT Records. Three singing female chipmunks, Brittany, Jeanette, and Eleanor, also known as The Chipettes, emerge from a FedEx package. Ian recruits and hires the Chipettes in an effort to resurrect his career.

While at school, the Chipmunks are ridiculed by jocks, who threaten to kill them for drawing their girls' attention away from them. They chase the Chipmunks around the school and give Simon a swirlie in a toilet. They visit the principal's office, only to discover that the principal, Dr. Rubin, is a huge fan, and she enlists their help to raise money for a music program by participating in a contest. Meanwhile, Ian is shocked to find the Chipmunks on the front page of his newspaper. After he reads a story about them, he quickly sends the Chipettes to school.

When the Chipmunks meet the Chipettes, both groups are smitten with each other. However, Brittany reminds the girls that Ian said the Chipmunks betrayed him and that they can’t be trusted. Meanwhile, Alvin and the boys struggle to make it through a rehearsal because of their new crushes. Suddenly, Ian smugly walks in and introduces his new stars, the Chipettes. The boys are shocked to see the girls are working with Ian and a rivalry quickly emerges when Ian convinces Dr. Rubin to let the Chipettes compete in the Battle of the Bands. With both groups wanting to compete in the Battle of the Bands, Dr. Rubin sets up a concert for them to compete in with the winners representing the school. Meanwhile, Alvin becomes popular with the jocks and joins the football team, not realizing that the next game is during the concert. At the concert, Theodore and Simon tell the fans that Alvin failed to show up, and that they cannot perform, leading to a victory for the Chipettes. When Alvin finally shows up after the concert is over, he finds the auditorium empty, and Brittany calls him out for his lack of responsibility. Alvin then returns home and attempts to apologize to his brothers, but is ignored. Theodore runs away the next day, until Alvin and Simon save him from an eagle, leading to the three making up.

Soon, the Chipettes are hired, but learn that the concert at which they are to perform as an opening act for a Britney Spears concert at the Staples Center is on the same night as the school contest. Ian convinces them to call off the battle and perform at the concert, but refuses to give the same credit to Jeanette and Eleanor that he gives Brittany. She demands that they all perform together or not at all, until Ian threatens to send them to a barbecue restaurant unless they perform.

Before the Battle of the Bands, Alvin receives a call from the Chipettes, who tell him that Ian has locked them in a cage, so Alvin races off to rescue them while Simon tells Jeanette how to pick the lock over the cell phone. Simon and Theodore are on the verge of going out to perform until the others arrive just in time to perform at the contest. The Chipmunks and the Chipettes perform together and receive the money for the music program. Dave, who had left the hospital upon learning that Toby was looking after the Chipmunks, returns during the contest, happy to see the Chipmunks again. Meanwhile, Ian is further exposed at the concert of Staples Center he set up for the girls when he attempts to imitate them, only for him to be taken away by security guards. After the contest, Dave allows the Chipettes to stay with them. In the next scene, both the Chipmunks and Chippettes are getting ready for bed. Alvin says he's not tired, but Dave says Alvin has school. They fight with the light switch, until Dave trips over Alvin's skateboard.

In the mid-credits scene, Dr. Rubin has the jocks scrape the gum off from under the bleachers in the gymnasium as punishment for making Alvin late for the sing-off. In the post-credits scene, Ian is thrown into a dumpster.

Dave, The Chipmunks, and The Chipettes go on a vacation on a cruise ship. The Chipmunks and the Chipettes, especially Alvin, end up creating pandemonium. Later that night, after Dave leaves to eat at the captain's table and apologize for Alvin's behavior, Alvin sneaks out to the ship's casino, followed by Simon, who hopes to keep Alvin out of further exposure; meanwhile the Chipettes go to the ship's dance club, leaving Theodore alone in the room, watching an unsuitable monster movie. Dave discovers that his old boss, Ian Hawke, is working as the ship's safety monitor dressed as a pelican, and is out to inform the captain if the Chipmunks and Chipettes cause more problems. Simon and Alvin are eventually caught in the casino, and are brought back to the room, along with the Chipettes, and all are accused by Dave for not being trustworthy. The next day, Alvin goes para-sailing on a kite, but the kite flies away with him and the other Chipmunks. Dave goes on a hang-glider to find them, but Ian attempts to stop him, and they both end up in the Pacific Ocean.

Meanwhile, the Chipmunks find an island, and they sleep for the night. Dave enlists Ian's help to find the same island and begin looking for the Chipmunks. The next morning, the Chipmunks go and find food, and while they do so, an island castaway named Zoe shows up and sees the Chipmunks and Chipettes for the first time. They then go to Zoe's tree house, where Eleanor sprains her ankle after falling off a zip line, and Simon gets bitten by a spider, the side effects including personality changes and loss of inhibition.

The morning after, everyone observes Simon's personality has changed, and he has no memory of being Simon; he also thinks he is a Frenchadventurous chipmunk named Simone. "Simone" becomes attracted to Jeanette and falls in love with her, but does not take as kindly to Alvin and Brittany. Later, Zoe takes Simone, Jeanette, Eleanor, and Theodore to a lake with a waterfall, and Simone finds a cave. He returns with a gold bracelet which he gives to Jeanette as a crown. Brittany and Alvin, having become the "responsible" ones, see an active volcano the next day, and they decide that they have to leave the island with the others. Theodore and "Simone" find Dave and Ian, and they go to meet with the other chipmunks. With Alvin and Brittany in charge, they are all assigned jobs to build a raft to leave the island. When Jeanette and "Simone" go and look for food, "Simone" is knocked unconscious, and Jeanette is kidnapped; "Simone" reverts to Simon afterward.

Everyone finds Simon awake, and he cannot remember anything since the change. They discover that Zoe has taken Jeanette, and they head towards the waterfall. When they approach the tree log to cross, Dave and Alvin decide that they will go and find Jeanette. As Zoe encourages Jeanette to find the treasure in the cave by tying her to a rope, Alvin and Dave come to her rescue. The island begins to rumble again, as Zoe lets go of the rope, and Jeanette runs with Dave and Alvin back to the raft, but is pulled back at the log bridge. Simon swings in to help Jeanette before Alvin can cut the ropes with a Swiss Army Knife. Dave is left hanging from the log when it almost gives away.

Alvin and Ian convince Zoe to help save Dave. They then run towards the raft and escape the eruption. While on the raft, Zoe apologizes to Jeanette for kidnapping her and forcing her to retrieve the treasure. As a gift, Jeanette gives Zoe the gold bracelet that Simon had given to her. Alvin reconciles with Dave, and they are rescued. The Chipmunks and Chipettes perform at the International Music Awards. Ian also starts a new career as a screenwriter by selling a screenplay about Zoe's story to Hollywood, earning him his wealth back.

In a post-credits scene, the Chipmunks, the Chipettes, and Dave are on a plane heading back home. Alvin is speaking on the pilot's microphone and tricks the passengers into thinking that the aircraft's destination is Timbuktu. Meanwhile, a stewardess keeps instructing Dave to sit down as the plane is about to take off. Alvin accidentally pushes the food cart, which hits Dave, leading to him doing the catchphrase.