Where the previous films were done from the perspective of human babies, the script is flipped when two dogs Trooper and Precious are in a fling. Puppies are a result and her owner decides to give them away; one day one puppy sees Mikey and Mollie walking by, Mollie rushes him onward, but the puppy catches his scent of cookies and dirt. He is taken by a pair of punks, but he manages to escape and becomes a stray dog. Meanwhile, James gets a job as a private jet pilot from Samantha, who seemingly has ulterior motives for him and keeps him extra busy and away from his home leaving Mollie to care after their children Mikey and Julie after she is laid off from her job in accounting. She gets a part time job as an elf for a mall Santa, and Mikey unexpectedly discovers that Santa is fake, destroying his belief in Santa Claus.
The puppy grows up wandering the streets and getting food from homeless men before getting caught and put into the pound. As a surprise one day James takes Mikey to the pound to pick out a dog for Christmas only to run into the puppy who is on his way to being destroyed after being there too long. They adopt him and name him "Rocks" because "that's what he left all over the back seat" of James' cab. Samantha, having also heard that Mikey wanted a dog brings in a pure breed poodle named Daphne for them. She is highly trained and looks down on Rocks the moment they meet. Having no choice, James and Mollie agree to have both dogs to not offend Samantha or take Rocks back to be destroyed. Rocks immediately gets the ire of Mollie by destroying her shoes and peeing in the house constantly. Eventually tired of Rocks, Daphne frames Rocks by chewing on a pair of Mollie's new shoes. She blows up at Rocks and tells him he is out, upsetting Mikey. Meanwhile James is called to work on Christmas Eve to fly Samantha to a private estate in northern New York and she effectively strands him there with her. Mollie, suspicious of Samantha gets her address and with the kids and dogs in tow, they head up to catch her. But Mollie crashes off the side of the road. Rocks, having picked up James' scent goes off to find him while Daphne, learning how to smell out people goes in search of rangers to help.
James catches onto Samantha's plan just as Rocks arrives, he pees on Samantha's leg and the two leave the house to find Molly and the others, not knowing Daphne had already gotten them rescued. They run into a pack of wolves and Rocks defends James; but the confrontation is ambiguous. Meanwhile, at the ranger station, Mikey sees who he thinks is Santa heading toward the station, but it turns out to be James. After a brief moment of worry that the wolves had destroyed his beeper, Rocks appears; apparently the pager sending the wolves off without harming either of them. The ranger turns on a broadcast from Santa on the radio, reigniting Mikey's belief in Santa Claus and Rocks is reinstated to the family for saving James from Samantha and the wolves.
John Travolta as James Ubriacco
Kirstie Alley as Mollie Ubriacco
David Gallagher as Mikey Ubriacco
Tabitha Lupien as Julie Ubriacco
Lysette Anthony as Samantha D'Bonne
George Segal as Albert
Olympia Dukakis as Rosie
Charles Barkley as himself
Danny DeVito as Rocks
Diane Keaton as Daphne
Bob Bergen
Peter Iacangelo
Nick Jameson
Patricia Parris
Pat Pinney
Rodney Saulsberry
Jeff Winkless
sequel to Look Who's Talking Too, the third film and final installment overall in the Look Who's Talking franchise.