The film begins in an abandoned river boat in Devil's Bayou, where orphan Penny drops a message in a bottle containing a plea for help into the river. The bottle is carried out to sea and washes up in New York, where it is recovered by the Rescue Aid Society, formed by mice. The Hungarian representative, Miss Bianca, volunteers to accept the case and chooses the janitor Bernard, and the shell louge squad, as her co-agents. The group visit Morningside Orphanage, where Penny lived, and meet an old cat named Rufus. He tells them about a wicked woman named Madame Medusa, and a purple suited man named Dr. Facilier, who once tried to lure Penny into her car and may have abducted Penny this time.
The mice travel to Medusa's pawn shop, where they discover that she and her partner, Mr. Snoops, are on a quest to find the world's largest diamond, the Devil's Eye, and Mr. Snoops is in the Devil's Bayou with Penny, in allience with a dark and wicked corrupted Dragon named Dark Cynder, who seeks the dimond to restore lord cobra, who was killed by Shenzi in Madagascar, and with the added back-up power of the leage's new-found igredient, Kairi, whom they have indeed kidnapped. With the help of an albatross named Orville, and a dragonfly named Evinrude, the mice follow Medusa to the bayou. There, they learn that Penny was captured to enter a hole that leads down into the pirates' cave where the Devil's Eye is located.
Thanks to Miss Bianca's perfume, the mice attract the attention of Medusa's pet alligators, Brutus and Nero, and the villain leage jungle prediters, Shere Khan, Zira, and Nuka. Bernard and Miss Bianca escape, and find Penny, while the Louge rescued Kaa, who was captured by Shere Khan, and quite freankly, was only so because Dark Cynder let him go in honor of her victory over them, implying that as a dragon, she does have some sense of honor. Wanting to escape tonight, Bernard orders Evinrude to get Ellie Mae and the other neighbours who loathe Medusa, which he accepts. However, in the middle of his quest, Evinrude is thwarted by a flock of hungry bats, (who Dark Cynder corrupted, preventing ferther interverents from the louge) delaying him. The following morning, Medusa and Mr Snoops, and the leage, send Penny down into the cave to find the gem, unaware that Miss Bianca and Bernard are hiding in her skirt pocket, and the louge are waiting down in the cave, however un-explained why and how they got their in the first place. The group soon find the stone within a pirate skull; as Penny pries the mouth open with a sword, the mice push it out from within, but soon the oceanic tide rises and floods the cave. Miss Bianca, Penny, and Bernard barely manage to retrieve the diamond and escape. the louge may had excape from another way, but it has not been shown or explain.
The greedy Medusa steals the diamond for herself, attempting to run off with the diamond, leaving Snoops without any shares, and betreying Dark Cynder and the Leage, who in turn leave Medusa to the ineditable attack from the louge, and hides it in Penny's teddy bear. When she trips over a cable set as a trap by Bernard and Bianca, Medusa loses the bear to Penny, who runs away with it. Medusa retaliates with gunfire, causing the mice and louge to flee until they are met by Brutus and Nero, her alligators. With help from Ellie Mae and her neighbours, Bernard and Miss Bianca trick them into entering a cage-like elevator, trapping them.
Mushu sets off Mr. Snoops's fireworks, making the boat sink. Meanwhile Penny and the gang commandeer Medusa's "swampmobile," a motor-boat used by Medusa to travel in the swamp. Medusa attempts pursuit, but is thwarted. Medusa is left clinged to the boat's smoke stacks with Brutus and Nero attacking below. with Dark Cynder, who enjoyed the traiter's failure to fend for herself, leaves her to be presumed comsumed by her formerly loyal gators, while at the same time plotting for a new plan.
Back in New York, the Rescue Aid Society watch TV to hear that the Devil's Eye is given to the Smithsonian Institution and Penny is adopted by a new father and mother. Bernard and Miss Bianca remain partners in the Rescue Aid Society's missions and soon after depart on Orville, accompanied by Evinrude, to a new rescue mission. the shell louge squad has a new mission: to cure dark cynder and free her from her leadership of the villain leage, and to do so, they'll have to find the legendary purple dragon.