In 1982 Brooklyn, a boy named Charlie Carbone is about to become the stepson of a crime boss named Salvatore Maggio. The mobster's apprentice Frankie Lombardo tries to drown Charlie, but a boy named Louis Booker saves him and they become friends.
Twenty years later, in 2002, Charlie now runs his own beauty salon, but Sal's henchmen take a majority of the salon's profits. After they botch the job of hiding some stolen tvs, Sal gives Charlie and Louis one more chance. Under instructions from Frankie, they are to deliver a package to a man in Australia. Frankie also warns them against opening the package, and to call Mr. Smith at the phone number he gives them should they run into any trouble. Unknown to Charlie and Louis, however, Sal tells his Capo that he is "canceling their return trip."
On the plane, Louis opens the package, to find $50,000. Upon landing in Australia, they rent a car and head to Mr. Smith. Along their way, they accidentally run over a red kangaroo. Thinking it is dead, Louis puts his jacket on the kangaroo and with sunglasses to pose for photographs as a joke, as he thinks the kangaroo looks like one of Sal's henchmen from Canarsie. The kangaroo then regains consciousness and hops away with the $50,000. Charlie and Louis get into their car and try to reclaim the money from the jacket on the kangaroo, but the ensuing chase ends with the duo crashing into a pile of rocks, wrecking the car.
At a pub, Louis manages to call Mr. Smith and tries to explain their situation. Mr. Smith, however, thinks they stole his package and threatens to kill Louis and Charlie, telling him that they had better have the money ready when he meets them, or he will "feed them to the crocodiles". Back in New York City, Sal gets the call from Mr. Smith saying that Charlie and Louis haven't arrived; Sal then sends Frankie and some men to Australia to investigate.
Meanwhile, Charlie and Louis attempt to reclaim the money from the kangaroo by shooting it with a tranquilizer in a plane. The attempt fails when Louis accidentally shoots the pilot and strands the duo in the desert. They spend hours wandering in the desert, during which Charlie hallucinates about a jeep, and they soon meet a beautiful girl from the Outback Wildlife Foundation called Jessie. Thinking she is only a mirage, Charlie grabs her breasts and she knocks him out with her canteen. While unconscious, Charlie dreams about meeting a rapping version of the kangaroo, while Sal and Louis mock him in kangaroo forms.
The following day, the trio then track the kangaroo at a nearby river and try again to catch it with bolas, but Louis accidentally botches their attempt when ants crawl up his pants. While waiting for the next opportunity to catch the kangaroo, Charlie begins developing feelings for Jessie, which she claims not to return at first, but he senses that she is lying.
The next day, Mr. Smith and his henchmen arrive and capture the trio. Charlie and Louis turn the tables and outsmart them, only to find Frankie has tracked them and is prepared to kill them. Just as he is about to, however, the kangaroo suddenly returns, causing a fist fight between Mr. Smith's henchmen and Frankie's crew, who outmatch them. The distraction allows Charlie, Louis, and Jessie to escape on their camels. A final chase ensues, with Charlie, Louis and Jessie chasing after the kangaroo while being pursued by Frankie and his goons. Louis finally manages to retrieve the money from the kangaroo but ends up nearly falling down a cliff and is narrowly saved by Charlie and Jessie.
After getting the money back, Charlie tries to hand it over to Frankie once and for all, but the latter angrily declines and reveals that Sal really sent them to Australia to pay for their own execution at the hands of Mr. Smith, much to the shock of Charlie and Louis. Out of nowhere, the police force led by an undercover cop arrive and arrest Frankie, Mr. Smith, and their henchmen. Charlie reclaims Louis' jacket from the kangaroo.
One year later, Charlie and Jessie are married and have used Sal's $50,000 to start a line of new hair care products bearing a kangaroo logo. Frankie, Mr. Smith, and their men have been imprisoned for life, a punishment that Sal had also failed at avoiding. The kangaroo, now called "Kangaroo Jack", is still happily living in the outback. Now able to speak again, Jack breaks the fourth wall, explaining why the film should end with him and closes it with his version of Porky Pig's famous catchphrase "That's all, blokes!"
Jerry O'Connell as Charlie Carbone, the owner of a beauty salon.
Robert Reid as young Charlie Carbone
Anthony Anderson as Louis Booker, the best friend of Charlie. Anderson also voiced his kangaroo counterpart in Charlie's nightmare.
Shawn Smith as young Louis Booker
Estella Warren as Jessie Carbone, a member of the Outback Wildlife Foundation that helps Charlie and Louis.
Michael Shannon as Frankie Lombardo, a gangster who is the apprentice of Sal.
Brian Casey as young Frankie Lombardo
Christopher Walken as Salvatore 'Sal' Maggio, a mobster and Charlie's stepfather. Walken also voiced his kangaroo counterpart in Charlie's nightmare.
Dyan Cannon as Anna Carbone, Charlie's mother
Adam Garcia as Kangaroo Jack 'Jackie Legs' (voice, uncredited), a red kangaroo who Louis put his "lucky jacket" on.
Marton Csokas as Mr. Smith, a man who Charlie and Louis are to deliver a package to.
Bill Hunter as Blue, a pilot who Charlie and Louis enlist to help catch Jack.
Tony Nikolakopoulos as Sal's Capo, an unnamed capo who works for Sal.
David Ngoombujarra as Sergeant Jimmy Inkamale, a man who is an undercover member of the Australian Police
Christopher James Baker as Crumble
Lara Cox as Cute Girl On Plane