A few months pass since Blythe left for her summer junior program, but her dream school is not as exciting as she thought it would be when all the campus talks about is fashion. Meanwhile, aching to see her in person again, the pets come up with a plan to visit Blythe while she is away at fashion camp for the summer.
Blythe accidentally starts a new fashion craze with her wild "Nest Hat", inspired by a nest that lands on her head. To her shock, she finds an unhatched egg laying inside of it. The pets are chosen to take care of the newly hatched chick using their animal instincts, while Blythe tries to find the chick's mother. However, her plans fall in the hands of the Biskit twins, holding her hostage while trying to exploit her new-found fame.
Russell becomes ecstatic as he reviews the plans for his first slumber party while with Blythe at the day camp. Jealous that they are not invited, Sunil and Vinnie make plans to crash their party. Meanwhile, Mrs. Twombly notices her supplies are being consumed by something, and jokingly cites a poltergeist as the cause of it, which awakens Russell's superstitions about a ghost he read up on. Later, Sunil and Vinnie's attempt by to break in to the pet shop sends the city without power, causing Russell to hallucinate an octopus-like creature trying to devour him.
An endangered specimen of cobra escapes from within a pet carrier of Fisher Biskit, after finding a potential buyer for it. Meanwhile, after three straight days of rain, the pets go on a walk with Blythe to their public park. Sunil breaks away from the group, and finds himself among a group of tribal raccoons, as well as a pigeon who can understand them. There, they find the escaped cobra, and Sunil saves them after confronting it using his primal instincts. They celebrate, and the raccoons force Sunil to stay with them indefinitely as their king.
Mrs. Twombly is inspired to set up a booth for a self-proclaimed pet psychic by the name of Finola, after she demonstrates her mind-reading on the pets by describing their personalities (while getting them entirely wrong). However, her predictions for other customer's pets break the bank for Mrs. Twombly; all her prognoses revolve around the pet wanting a brand of dog food. Meanwhile, the pets suffer while trying to mold themselves into Finola's personality readings, trying to avoid disrupting her partnership with Mrs. Twombly. When Blythe sees what is happening, Finola's pet sugar glider, Sweet Cheeks, may have the answer for Blythe as to what his owner's business really is.
The host of a reality television series informs Mrs. Twombly of buried treasure located beneath Littlest Pet Shop, belonging to one of her ancestors. Their efforts at excavation quickly become the source of irritation for Blythe when they start causing property damage, and the source of outrage for Pepper, who takes the crew's map to show to the pets. There, the roots of Littlest Pet Shop are uncovered, and the story of Henrietta Twombly is told in the form of flashbacks.
On nail-clipping day at the day camp, Sunil becomes anxious about being clipped and cowers in fear in front of Blythe's friends. Jasper, who finds his worried facial expression cute, takes a picture of him with his phone and edits it into an image macro. Soon after he uploads the macro on the Internet, Sunil and the day camp attracts media coverage from across the globe. His attention becomes the source of jealousy for Zoe, and the vanity of the Biskit twins, who produce a music video of themselves in an attempt to become viral.
When Blythe's enters her dress designs for the The Big, Feathered Parade at the parade's warehouse, she is promptly denied due to age restrictions. There, she comes across Ramon (voiced by Colin Murdock), the head designer of the parade, and his Common Myna, Desi (voiced by Brian Drummond). Ramon becomes impressed upon seeing her designs, and decides to steal them by switching her portfolio with his identical one. Blythe notices the replacement, and when she sees her designs being used on every aspect of the parade the next day, she sets off to reclaim ownership of them. Meanwhile, when Vinnie pairs with Zoe to quench his obsession, Bruce the iguana (also voiced by Murdock), he struggles to find a water bottle big enough for Bruce.
After losing a ball while playing catching, Minka and Penny Ling try to retrieve it when it rolls into a natural history museum. Blythe tries to retrieve the two without losing all the other pets, but finds out that the museum disallows animals. She conceals the rest in her bags and backpack, but as she spots the two that were missing, Zoe flees from her bag upon inspection from the museum's security guard. Now with three of the pets missing, Blythe must manage to find them all, eventually losing the rest in the process: Sunil and Vinnie in the taxidermy section, and Russell in a supply closet.
Roger reveals to Blythe that he has just submitted Blythe's pet backpack to Mona Autumn, a critic for the top fashion magazine, Très Blasé. Knowing that Autumn's critiques are notoriously harsh, she starts panicking about her interview, ignoring the pet's problem with a new visitor, Wiggles McSunbask (voiced by Colin Murdock), a juvenile alligator who soon takes over the day camp. When Blythe's designs are rejected by Mona, as feared, and suggests that she peruses another career, she grows depressed, much to the sadness of Roger and the helplessness of the pets.