Greg Heffley, a small 11 year old who constantly fights with his teenage brother Rodrick and younger brother Manny, is apprehensive about beginning middle school. On his first day, he quickly discovers the ups and downs, such as the missing stall doors in the boys' bathroom and the difficulties of obtaining a seat during lunch. During P.E. class, he and his best friend Rowley Jefferson escape from a game of Gladiator and learn about a rotten piece of cheese on the basketball court that makes anyone who touches it an outcast, known as the Cheese Touch. Greg also meets Angie, a girl who isolates herself from the other students to survive. Greg states his intention of becoming the most popular student in school.

The next day, Greg signs up for wrestling but suffers back-to-back humiliating losses against Fregley, a weird outcast, and Patty Farrell, Greg's arch-enemy from elementary school. On Halloween, while out with Rowley, they encounter teenagers while trick or treating who spray a fire extinguisher at them. When Greg threatens to call the cops, the teenagers chase them to his Grandma's house, but Greg and Rowley escape the teenagers after Greg accidentally wrecks the driver's truck.

The boys join Safety Patrol in an effort to become popular, and they try out for a contest that offers a student a chance to become the new cartoonist for the school paper. After Greg breaks Rowley's arm during a game the boys played, Rowley becomes extremely popular, and wins the cartoonist contest, making Greg becomes jealous of him. During a Safety Patrol assignment, Greg panics when he encounters a truck identical to the teenagers' from Halloween, and hides the kids in a construction zone. Greg is spotted by a neighbor who mistakes him for Rowley. To his own bewilderment, Rowley is suspended from the Patrol, but Greg eventually confesses to Rowley that he was the who was responsible. Upset and feeling betrayed that Greg didn't own up to his actions, Rowley berates Greg for not being a good friend and ends their friendship. Greg is eventually suspended from the Safety Patrol while Rowley is reinstated and makes friends with his classmate Collin, who replaces Greg as his new best friend.

Greg decides to pursue popularity without Rowley by joining the school's production of The Wizard of Oz. At tryouts, Greg's soprano voice earns him the role of Dorothy; however, Patty threatens the teacher into casting her instead. Greg signs up as a tree, hoping to throw apples on Patty during the play, but during rehearsal, the trees are told they won't throw apples but sing a song instead. At the performance, Greg refuses to sing as Rodrick is videotaping the performance, and begins throwing apples after Patty throws a huge fit at what Greg has done, ending the play in chaos.

Later, Greg and his mother attend a mother-son dance at the school despite his reluctance. At Susan's encouragement, Greg attempts to reconcile with Rowley but is rejected. Depressed, he can only watch as Rowley and his mother perform a dance routine to Intergalactic, winning over the crowd and shocking Greg.

One day after school, Rowley and Greg loudly confront each other. Patty and the other kids force Greg and Rowley to fight; however, neither of them are good at fighting. The teenagers from Halloween arrive at the scene and catch the boys, forcing Rowley to eat the Cheese before a teacher chases them off. When the other kids notice that the Cheese has been eaten, Greg takes the fall for Rowley by saying he ate it. This mends their friendship as Greg invites Rowley to play at his house.

At the end of the school year, Greg and Rowley make the yearbook Class Favorites page as "Cutest Friends."

The Heffley family attends a party at a roller rink, where Greg Heffley reunites with his best friend Rowley Jefferson, meets a new girl at school named Holly Hills whom Greg instantly has a crush on, and reveals he passed on the Cheese Touch. During the party, his older brother Rodrickadvises Greg to ask Holly to skate with him when Couples Skate begins and then interferes with Couples Skate by persuading a crowd of violent teenagers to enter the rink, along with replacing "Always" by Atlantic Starr with a heavy metal song. This prompts Greg's parents, Frank and Susan(who misunderstand this) to speak to Greg on the rink's public address system and then carry him off the rink. Greg, extremely angry with Rodrick for humiliating him, tries to tackle him, but he misses and in turn, lands in a little girl's birthday cake. She and her friends then furiously proceed to beat up Greg as the intro starts.

On the morning of the first day of school, as Greg and Rodrick are about to leave, Susan makes an effort to have them bond by doing some things together by using her methods called "Mom Bucks", but it makes things worse as Rodrick cheats her system. At school, one of Greg's new teachers immediately dislikes him due to his relation to Rodrick, therefore making the teacher assume that Greg will be as bad. After school, a community talent show is advertised on TV; in which Rowley sees it as an opportunity to perform magic, and Rodrick sees it as a big break for his band, Loded Diper. However, Greg rejects the idea of doing the magic.

At church, Greg and Rodrick are grounded after a scuffle due to Rodrick humiliating Greg by placing a chocolate bar on Greg's seat in the car on the way, causing Susan to get upset about what others think of her, and her family's reputation being ruined; after which, they are forbidden to go to a family trip to a water park the following weekend, nor inviting people over, and told that they must bond. However, Rodrick defiantly disobeys his parents' orders, and throws a party.

The next morning, Susan calls and says that they will be home early. Rodrick and Greg hastily erase almost all the evidence, but find out that the bathroom door is vandalized with graffiti. They replace it, but Greg finds out that the replacement door doesn't have a lock like the last one. Rodrick convinces Greg to deny everything as their parents and younger brother, Manny arrive. Susan however, later slowly began to discover the difference and questions Greg and Rodrick. Although Rodrick denies this, Greg nearly reveals the truth and convinces Susan to not to punish Rodrick. Convinced that Greg didn't reveal about the party, Rodrick starts bonding with him as a gesture of gratitude.

One night, after coming home from a night out, they are finally exposed when Frank comes across photos of the party and the Heffley's reputation is ruined again, and no one will support Susan's articles about siblings bonding anymore. As Susan and Frank decide on the boys' punishments, Greg tries to apologize to Rodrick, but Rodrick gets mad at him for getting them in trouble. As punishments, Greg and Rodrick both get grounded again, which includes Rodrick not being allowed to participate in the talent show. Completely devastated and heartbroken, Rodrick vows to get even with Greg.

The final part of their punishment is they have to stay at their grandfather's retirement home, in which Greg finds out that Holly is visiting her grandmother. Holly tells Greg that she can relate to Greg about siblings giving her a hard time; however, siblings will eventually get over it. Holly also reveals she is more patient and mature than her two sisters. The next day, to humiliate Greg, Rodrick reads and steals Greg's diary - in which Greg has written about his crush on Holly - and attempts to hand it over to Holly. Greg, with only his underwearon, chases after Rodrick and takes the diary back, but he accidentally hides in the women's restroom and a group of angry women in the restroom think he is a "peeping tom" and they attempt to catch him, but fail. When Greg returns, Rodrick reveals to him that he taped the whole incident on a VHS tape from the security cameras in the retirement home.

At the talent show a few nights later, Rodrick finds out that he has been booted from the band by Bill Walter, a band member who recently joined; Rowley is unable to perform his magic tricks due to his assistant, Scotty Douglas, having stage fright. Greg, with a change of heart, helps Rowley and Rodrick out by participating in Rowley's magic act in return for allowing Rodrick to perform his band act. In the middle of the performance in the talent show, Rodrick banishes Bill from the band for what he did. Before dropping Greg off at school the next morning, Rodrick gives him the tape from the retirement home in return for making it possible for him to participate in the show, symbolizing that they are not only brothers, but also friends.

In a mid-credits scene, Greg and Rowley have just finished posting the video that Frank shot of Rodrick's music act with Susan dancing on YouTube, and it goes viral instantly, making Greg and Rowley an internet sensation. However, an enraged Rodrick, having seen the video, shouts at Greg off-screen, "GREG, YOU ARE SO DEAD!!!"

The Heffley family attends a pool party at the community pool, where the family meets Lenwood Heath, a former trouble-making friend of Rodrick who is now a model student after attending a prep school known as Spag Union. Greg's father Frank thinks about enrolling Greg there. Greg's summer vacation starts off badly: Frank bans video games in anger at Greg's laziness, and his mother Susan starts a book club for all the boys in the neighborhood, but she does not see their books as real literature causing the boys to never come back the next day. Frank is also getting jealous of the neighbor's athletic kids, and after his video game ban, Susan forces Frank and Greg to bond with each other: their bonding activities end in disaster.

A few weeks later, Greg's best friend, Rowley Jefferson, takes Greg to the local country club, where his family are members of. Greg enjoys the lifestyle there and the fact that his crush, Holly Hills, teaches tennis there and he doesn't have to go to the book club. Greg returns home to learn that Frank signed him up for an unpaid summer internship at his work without his consent, and Greg lies about having a job at the country club. Frank and Susan are delighted, and give him a starter cell phone, a Ladybug, which only allows him to call home or 911.

Later, Rowley invites Greg on a family trip to their beach house near the Boardwalk, but Greg finds the lifestyle banal and attempts to escape. He E-mails Susan and tries to call home using his Ladybug phone, but the phone rejects the call, and after he inadvertently calls 911, the police arrive, almost leading to the arrest of Rowley's father (after making the mistake of bringing a bread knife to the door), who sends home Greg in anger. Rowley doesn't allow Greg to tag along with him to the country club because of the beach house incident, but Greg sneaks in, meets up with Holly and her sister Heather and manages to get Rodrick's band Loded Diper a gig at Heather's Sweet 16 birthday party, much to Rodrick's delight.

Rowley and Greg quickly make up, but Rowley is unable to attend the club, forcing Greg to sneak in again. One morning, Frank drops Greg off, only to be confronted by Rowley's father: Greg has built up a $260 fruit smoothie bill from his time at the country club. When Frank attempts to explain the situation, the clerk informs him that the club does not employ minors, and Greg is exposed. As a result, when he receives a Spag Union disc in the mail, he fears he will be sent there.

Rodrick informs Greg that a "Wilderness Weekend" event could be a way to avoid Spag Union. Their troop proves weak compared to Frank's boss, Stan's, troop. After a Camp story, Greg continues to mess things up and Frank tells him that everyone messes up. After the boys overhear Stan and his troop insulting Frank, Greg attempts to set up a plan for revenge by using traps, and finds out that Stan's troop has been using electric and other appliances including pre-cooked meals and portable TV's rather than actually camping. Stan arrives at the tent, Greg manages to escape while Stan accidentally throws his own tent into the campfire, and Greg admits he was responsible but his friends tell him that he did it to defend his honor. Frank, having lost his respect for Stan, then confronts him with the electronic conveniences (although he was jealous of Stan throughout the movie), and Stan runs into Greg's trap, leaving him humiliated.

Frank ends up revealing to Greg that he was never really all that into camping anyway, and decides not to send Greg to Spag Union, much to Greg's surprise and delight. As the father and son talk things over, Frank gives Greg advice on learning from your mistakes and taking responsibility for your actions, and the two of them ultimately realize that they're actually much more alike than they originally thought.

A few days later, Loded Diper goes to Heather's Sweet 16 birthday party, where Rodrick performs a hard rock cover of "Baby" by Justin Bieber and Ludacris, attempting to impress Heather. However, Rodrick accidentally knocks over a huge ice sculpture of Heather, which results in her losing her temper and accidentally smashing a chocolate fountain with a microphone stand (while trying to hit Rodrick), splashing chocolate all over her and her friend Madison, and the party ends in disaster. Holly then implies that she likes Greg by holding his hand, and in the final scene, Greg, Holly, and Rowley all hang out together at the local pool. Greg admits that while his summer didn't go the way he expected, it was ultimately a pretty good summer and might be the best one ever.