On a peaceful sunny day, Bikini Bottom and its residents are suddenly scooped out of the ocean by the B.O.O.T.S. (Bureau Of Official Texas Science) Laboratory, where Sandy Cheeks works, in Galveston, Texas. Unsure of the lab’s intentions, Sandy and SpongeBob SquarePants head to the surface to find the lab and return Bikini Bottom to the ocean floor. They catch a ride on an airplane, but a tornado blows them severely off course as they glide towards the lab.

At the lab, the residents of Bikini Bottom are terrified. Mr. Krabs and Amy’s parents, Leo and Inez Wong, step outside to investigate and are startled by the sight of a human woman, Phoebe, one of Sandy’s closest colleagues, along with Kyle. They discover that Sandy and SpongeBob were not captured, angering Sue Nahmee, the new head of B.O.O.T.S., who orders Phoebe and Kyle to find them immediately.

SpongeBob and Sandy encounter a gang of rattlesnakes, and after Sandy is bitten, she calls for her family, revealed to be a traveling circus act. They defeat the rattlesnakes and agree to take Sandy and SpongeBob to the lab. Meanwhile, Sue explains her plan to genetically modify the people of Bikini Bottom into air breathers and clone them to sell as toy pets. Kyle and Phoebe capture Mr. Krabs, Amy, Squidward, and Patrick for testing, subjecting them to torturous play scenarios. Sue is pleased with the results.

While Sandy’s brother Randy teaches SpongeBob the Cheeks family whistle, the family gets into a car chase with the police because Randy used the family van to smuggle nuts illegally. They temporarily evade the police using the tornado but are eventually caught. As a last resort, SpongeBob and Sandy are launched out of a cannon to the lab. They arrive at the lab’s water park and are chased by Sue Nahmee’s pet pug, Cuda, into the sewers, leading them into the lab. Sandy learns about Sue’s plans and tries to attack, but Sue captures her and puts SpongeBob on a roller coaster ride towards the cloning chamber. Sue, revealing herself as a cyborg, explains her motives stem from a childhood wish to cuddle with fish, leading her to spy on Sandy’s life in Bikini Bottom.

A tiny version of SpongeBob encourages Sandy not to give up, leading to a final confrontation where Sandy decapitates Sue, feeding her head to her pet fish, fulfilling Sue’s dream of being a fish. Mr. Krabs and Amy discover that mushing the tiny SpongeBobs together will restore SpongeBob to normal size. As they work to fix SpongeBob, the stand holding the giant glass orb containing Bikini Bottom collapses, causing water to leak out. Sandy tries to call her family for help but realizes she lost a tooth during the fight with Sue. SpongeBob, having learned the whistle, calls for the Cheeks family, who arrive in time to rig a mechanism to launch Bikini Bottom back into the ocean.

With Bikini Bottom returned to its rightful place, everyone celebrates with a performance by the Cheeks family circus at the Krusty Krab. SpongeBob, after acknowledging that he and the entire town of Bikini Bottom are Sandy’s second family, confesses his romantic feelings for her. Sandy reciprocates, and they share their first kiss, officially becoming boyfriend and girlfriend.