This movie begins with British spy Finn McMissile, who infiltrates the world's largest untapped oil reserves, owned by a group of "lemon" cars. After being discovered, he is forced to flee and fake his death.
Four-time Piston Cup champion race car Lightning McQueen returns home to Radiator Springs and reunites with his best friends Mater, Winnie the Pooh, Thomas the Tank Engine, Twilight Sparkle, Ash Ketchum and their friends and his girlfriend Sally Carrera. Doc Hudson is revealed to have died by an indication with Mater and Lightning. Former oil tycoon Miles Axlerod, now a green power advocate, announces a racing series called the "World Grand Prix" to promote Allinol biofuel. When Italian formula race car Francesco Bernnoulli challenges McQueen, McQueen, Mater, Pooh and the others depart to Tokyo, Japan for the World Grand Prix.
Meanwhile, the lemons, led by Professor Zundapp, Diesel 10, Devious Diesel, Discord, Queen Chrysails and the Lemon Mastermind (whose whereabouts are revealed at the climax), secretly plot to secure their oil profits by using a weapon disguised as a television camera to ignite the Allinol fuel. Finn and partner Holley Shiftwell attempt to rendezvous with American spy car Rod "Torque" Redline at a World Grand Prix promotional event in Tokyo to receive information about the mastermind; however, Redline is cornered by Zündapp's henchmen and passes his information to Mater before he is captured. Holley and Finn mistake Mater as their American contact. In capture, Zündapp and Pooh, Thomas and Twilight's enemies reveals to Torque that Allinol has one fatal flaw: it can ignite if impacted by a high electromagnetic pulse and uses both to kill him with it but not before they realize that he passed it on to Mater.
During the first race, Finn and Holley help Mater evade Zündapp's henchmen; in the process, Mater inadvertently gives McQueen negative advice which causes him to lose the race close to Francesco. Meanwhile, Zündapp and the villains used the weapon on several race cars. After McQueen falls out with Mater, who sadly claims that he is leaving (along with Pooh, Piglet, Tigger, Rabbit, Eeyore, The Vultures, Jiminy, Zazu, Thomas, Percy, Bash, Dash, Ferdinand, Luke, Twilight and her friends, Ash and Pikachu), Finn, who still believes Mater is an American spy and Pooh and his friends are American spies as well, drafts them into foiling Zündapp's plot.
In Italy, the site of the second race, Mater and our heroes infiltrate the criminals' meeting and discover Zündapp and the villain's plan. Zündapp's henchmen (Grem and Acer) and Team Rocket, meanwhile, use their weapon on several more cars during the race, eventually causing a multi-car crash on the Casino Bridge. With the Allinol fuel under suspicion, Axlerod suspends its use for the final race in England; however, McQueen decides to continue using it. The criminals decide to kill McQueen in the next race; upon hearing this, Mater and our heroes are exposed and are captured along with Finn and Holley and tied up inside Big Bentley's bell tower in London.
After having a nightmare that showed him his crazy antics during the World Grand Prix while he was knocked out, Mater finally realizes how foolish he has been acting. Grem, Acer and Team Rocket use the weapon on McQueen during the race, but nothing happens. Mater, Pooh and the others flee to warn their friends of a bomb planted in McQueen's pit stop, but Finn and Holley find that the bomb was planted on Mater. They warn Mater about the bomb before Mater, Pooh, Piglet, Tigger, Rabbit, Eeyore, Twilight, Ash, Pikachu, Thomas and Percy flee to protect their friends. However, they are pursued by McQueen in an attempt to reconcile, unaware of the real danger until they are out of range of Zündapp's remote detonator. He sends his henchmen to kill McQueen and Mater, but they are foiled by the combined efforts of Finn, Holley, the rest of Pooh, Thomas and Twilight's friends and the Radiator Springs residents who arrest them. Diesel 10 and the other villains are forced to flee, but they vow that they will be back with revenge. Team Rocket get blasted off by Pikachu's Thunderbolt. Upon his capture, Zündapp reveals that only the person who installed the bomb can deactivate it and Mater realizes that Axlerod is the mastermind behind the plot. Mater confronts and forces Axlerod in front of police cars to deactivate the bomb in a final confrontation, by trapping him next to him while being strapped to the bomb. Axlerod finally deactivates the bomb, and he, Zündapp and the lemons are arrested by the police for their crimes.
As a reward for his heroism, Mater receives an honorary knighthood from the Queen and Princess Celestia (who came to see the last race of the World Grand Prix and she is a good friend of the Queen) and returns home with his friends, where the cars from the Grand Prix take part in the unofficial Radiator Springs Grand Prix. Fillmore reveals that before the last race, Sarge replaced McQueen's Allinol with Fillmore's organic fuel, which prevented McQueen from being affected by the weapon. Finn and Holley invite Mater, Pooh and the others to join them in another spy mission, but they graciously turn it down but Mater asks Shiftwell for a date when she returns which she accepts. He gets to keep the rockets they gave him earlier, which he uses in the Radiator Springs race.
- The Vultures (Buzzie, Flaps, Dizzy and Ziggy), Jiminy Cricket, Zazu, Thomas the tank engine, Percy,James, Emily, Toby, The Logging Locos (Bash, Dash and Ferdinand), Luke, Twilight Sparkle, Applejack,Pinkie Pie, Rainbow Dash, Rarity, Fluttershy, Ash Ketchum, Pikachu, Misty, Togepi, Brock, Diesel 10,Devious Diesel, Discord, Queen Chrysalis and Team Rocket (Jessie, James and Meowth) guest star in this film.
- The music for the opening credits is the opening music from "Misty Island Rescue" and "Day of the Diesels."
- The songs for the end credits are "Collision of Worlds (sung by Brad Paisley and Robbie Williams)" and "Nobody's Fool (sung by Brad Paisley)".
- In this movie, Tigger refers to Lightning McQueen as "Lightningy boy," Mater as "Mater boy" and Finn McMissile as "Finny boy".
- Both Winnie the Pooh and Cars 2 were released in theaters in 2011.
- Diesel 10, Devious Diesel, Discord and Queen Chrysails are working with Professor Z while Jessie, James and Meowth of Team Rocket are working with Grem and Acer (who are working for Professor Z).
- No villain is working with Sir Miles Axlerod in this film. This is because Axlerod is not revealed to be the main villain of this film until the climax, where it is revealed that he is the Lemon Mastermind, and the one who installed the bomb on Mater.
- During the film, Pooh, Piglet, Tigger, Rabbit, Eeyore, The Vultures, Jiminy Cricket, Zazu, Thomas, Percy, Bash, Dash, Ferdinand, Luke, Twilight Sparkle, Applejack, Fluttershy, Rainbow Dash, Pinkie Pie, Rarity, Ash and Pikachu go with Mater to join Finn McMissile and Holley Shiftwell on their special mission while James, Emily, Toby, Misty, Togepi and Brock go with Lightning McQueen to help him win the World Grand Prix.
- Princess Celestia makes a special appearance near at the end of the film (during the whole thing taking place in London); she was a special friend of The Queen and she came to see the World Grand Prix.