A mad scientist named Dr. Carver, the great-great-grandson of George Washington Carver, is trying to generate a super 'Genome Warrior', a prototype for an army of humanoid peanut warriors, but it disintegrates. The scene then turns to Penny Proud, who is celebrating her 16th birthday in her hometown of Wizardville, California, and fails her driver's ed. She and her friends are excited to be a part of 15 Cent's (Sticky's cousin and parody of 50 Cent) dance group, Spare Change.
Oscar Proud, Penny's over-protective father, has invented an everlasting multiplying formula that was supposed to make his Proud Snacks tastier, but it instead causes the snack to expand and explode. As he is hauled away from his presentation, he proclaims his formula has no expiration date. Dr. Carver overhears Oscar's ranting; plots to get Oscar's formula since he has never gotten his experiment to stabilize. When 15 Cent drives Penny home, Oscar gets mad when he finds them kissing. After Oscar gives her the worst grounding of her life, and in effect cancels her birthday party, Penny - in a fit of rage - wishes he wasn't her father. This marks the culmination of their relationship as seen over the entire series. Disguising himself, Carver invites the family to Legume Island. Penny's mother Trudy convinces Oscar, Sugar Mama, and Penny to go in hopes they will re-bond. The family meets the inhabitants of the island, short peanut creatures called the Genomes.
Carver tries to negotiate obtaining the formula from Oscar by offering him $10 million. However, a Genome named Wally convinces Oscar not to. When Oscar refuses (who doesn't have the formula with him), Carver constructs peanut clones of his family via DNA snatched from them while they were partying. Oscar runs away and tries warning to his family, but they don't believe him. The clones get a mix-up when the real Penny comes with them back to the mainland to search for the formula; Penny's clone remains with the original family. Penny soon enjoy the free life which the clones allowed her, in spite of their bizarre personalities and Oscar's clone becoming a celebrity, but quickly tires of it. She discovers that Cashew, a Genome she befriended earlier on the island, had stowed away; he wanted to see what it was like to have a 'real family.' He also reveals to her the nature of the clones.
At that moment, Wally leads the Prouds and the Penny clone on a perilous journey to the other side of the island, where he claims there is someone who can answer their questions. Along the way, the Penny clone proves to be the kind of daughter Oscar desires – obedient. When they meet the person Wally wanted them to meet, he turns out to be the real Dr. Carver. Good Carver explains that he moved to the island and commute his goal on cloning technology and created the friendly island creatures. He wanted somebody to inherit all that he learned and cloned himself, it was a success, but the clone went sizzling crisp in the sun one day and turned evil. Donning a disguise of his original form, the clone took over the island and forced the Genomes to work for him (excluding Wally) and started using Carver's peanut research for world domination. Oscar realizes his formula is the key and tells he had left it in a necklace for Penny's birthday, which she opened back home. Her clone informs the others, who took the formula. Penny and Cashew gather her friends to go back to Legume Island and rescue the family. They hijack 15 Cent's yacht to get there, though Penny accidentally sinks it in the process.
Evil Carver has already prepared to leave and take over the world with his perfected Super Genomes. The clones' attack Penny, her friends and family, but she convinces the Oscar clone to help - by bribing him with hot dogs he had become obsessed with - and he defeats the rest of the clones. Evil Carver unleashes a sea creature on them but Good Carver recognizes the monster as Bobo, a failed specimen that went bad and convinces it to being good. Seeing the evil Carver making his getaway, Good Carver reveals a possible solution - a container of gas that could instantly turn solid peanuts into peanut butter. Penny takes the gas, boards the clone's airship, and battles him with help from Oscar, who para-sails up using one of Sugar Mama's giant underwear. Just as Penny is on the verge of releasing the gas, Evil Carver offers her to join him and live a free life, without rules or responsibilities. However, Penny retorts that, even though they aren't the perfect ones, her family is who she cares about and unleashes the gas, foiling the clone's plot and destroying the army. The clone, having only been hit slightly by the gas, turns back into a peanut and falls into the ocean. Oscar then gives Penny her birthday necklace, stating that he now knows she's mature enough to make her own decisions, and finally accepts her for who she is, making up on national TV.
15 Cent has Penny and her friends sing (reforming their past girl group, LPDZ) instead of acting as his back-up dancers and the crowd loves them. On Legume Island, the good Carver and his peanut people along with the Proud clones listen as a radio announcer says that Penny and her friends' song has been popular for five weeks in a row.
Three days later where Cashew is now part of the Proud Family, Penny is receiving her driver's license and helps Oscar by driving through town advertising his new drink Pork-Nut-o-Rade, but Puff drank it back home earlier, turning him into a large and rampaging monster. He chases them around the world up to China, until Suga Mama, who also drank the concoction, takes him home.