Due to a shortage of police officers, Mary Sue Beal, the mayor of an unnamed large city, requires the police department to accept all recruit applications. Easy-going Carey Mahoney, a repeat offender, is given a choice by Police Captain Reed: enroll in the police academy to reform himself, or go directly to prison as a parole violator. Mahoney agrees to the demand, but plans to perform badly enough to be expelled for cause. The chief of police, Henry Hurst, outraged by the Mayor's plan, decides to make the experience so bad for all new recruits that they will simply give up and resign.
Lieutenant Thaddeus Harris makes their lives miserable, though Commandant Eric Lassard wants to give the new cadets a chance. Harris appoints Copeland and Blankes as cadet squad leaders to help him secretly execute his plan.
Lassard reveals to Mahoney his deal with Capt. Reed: Mahoney must remain at the police academy for the full term. Mahoney falls in love with cadet Karen Thompson and befriends fellow cadets Larvell Jones, a human beatbox, ladies' man George Martin, gun-obsessed security guard Eugene Tackleberry, cowardly man Leslie Barbara, accident-prone Douglas Fackler and gentle giant Moses Hightower.
Blankes and Copeland investigate a party organized by Mahoney, who tricks them by saying that the party is being held at the Blue Oyster, which they quickly discover is actually a gay biker bar. In revenge, the pair plant a prostitute in Mahoney's dormitory, to be found during final room checks to get him expelled. While smuggling her off campus before this happens, Mahoney is forced to hide with her under a microphoned lectern, just as Commandant Lassard leads a group of fellow officers inside the meeting room. While Mahoney is not looking, the prostitute performs fellatio on Lassard as he speaks at the lectern. Mahoney later steps out from under it only to find Lassard still present, leading him to assume that Mahoney performed the deed.
Hightower reveals to Mahoney that he has not driven a car since he was 12. To help Hightower prepare for his cadet driving test, they steal Copeland's small, two-door Honda after ripping out the front seats so that Hightower can fit inside. After Hightower passes the test, Copeland racially insults cadet Laverne Hooks for causing an accident. Hightower, angered by the racial slur, overturns Copland's police cruiser with him still inside it. Harris ejects Hightower from the academy, upsetting the other cadets.
Blankes and Copeland fail to trick Mahoney into fighting them after they discover Copeland's destroyed car. Barbara stands up for Mahoney and knocks Copeland out with his metal lunch tray. Blankes retaliates, and Mahoney becomes involved in a brawl. When Harris asks who started the fight, Mahoney takes the blame to protect Barbara's cadet standing, and Mahoney is finally expelled from the academy.
While downtown, Fackler throws an apple from his police car window, which hits a man on the back of the head. This triggers a chain reaction of violence which quickly escalates into a full-blown riot. Mahoney, just about to leave, joins the other cadets to help pacify the growing, angry crowd. The cadets are accidentally transported to the epicenter of the rioting, and one criminal steals Blankes and Copeland's revolvers, whereupon the two hide out in the Blue Oyster Bar as the riot grows in size. A gang and their leader goes on to captures Harris, taking him hostage. Mahoney attempts to rescue Harris but is also taken hostage. Hightower appears, deceives the gang's leader, and easily tosses him down a full flight set of stairs to be arrested by Hooks.
Mahoney and Hightower are both reinstated, and for rescuing Harris and capturing his kidnapper, they receive the academy's highest commendation and medals, after which all the police cadets graduate from the academy.
Steve Guttenberg as Cadet Carey Mahoney
Kim Cattrall as Cadet Karen Thompson
Bubba Smith as Cadet Moses Hightower
Donovan Scott as Cadet Leslie Barbara
Michael Winslow as Cadet Larvell Jones
Andrew Rubin as Cadet George Martin
David Graf as Cadet Eugene Tackleberry
Bruce Mahler as Cadet Douglas Fackler
Marion Ramsey as Cadet Laverne Hooks
Brant von Hoffman as Cadet Kyle Blankes
Scott Thomson as Cadet Chad Copeland
G. W. Bailey as Lieutenant Thaddeus Harris
George Gaynes as Commandant Eric Lassard
Leslie Easterbrook as Sergeant Debbie Callahan
George R. Robertson as Chief Henry J. Hurst
Debralee Scott as Violet Fackler
Ted Ross as Captain Reed
Doug Lennox as Main Bad Guy
Georgina Spelvin as Hooker
Don Lake as Mr. Wig
Michael J. Reynolds as Office Executive
Gary Farmer as Sidewalk Store Owner
John Hawkes as Tesky Truck Driver
Kay Hawtrey as Surprise Party Lady
Dar Robinson as Plaid Thug
T. J. Scott as Tough
Hugh Wilson as Angry Driver
The first movie in the series with six sequels.