During the Chipmunks' benefit concert in Paris, France, David Seville (Jason Lee) is injured. Dave must recuperate and is forced to leave his aunt to look after the Chipmunks. Arrangements are also made for them to go to school. After another accident, the Chipmunks are left in the care of Toby (Zachary Levi), the grandson of Dave's aunt.

Meanwhile, Ian Hawke (David Cross) lives in the basement of JETT Records. Three singing female chipmunks, Brittany, Jeanette, and Eleanor, also known as the Chipettes, emerge and Ian hires them as plot to get back at the Chipmunks and revive his career.

While at school, the Chipmunks are bullied by jocks and visit the principal's office. They discover that the principal is a huge fan and wants them to help raise money for the music program by participating in a contest. Meanwhile, when Ian receives his daily newspaper, he is shocked to find the Chipmunks on the front page. After he reads the story, he quickly sends the Chipettes to school.

When the Chipmunks meet the Chipettes, they fall for their counterparts, but are soon forced to have a rivalry after discovering that they are with Ian. The Chipmunks and the Chipettes compete against each other in the Battle of the Bands contest. At the concert, the Chipettes sing and Alvin fails to show for the Chipmunks – who then forfeit. When Alvin finally shows, he finds the auditorium empty and is ignored by his brothers at home.

Soon, the Chipettes are hired. Unfortunately, the concert is on the same night as the school contest, so Ian decides to blow off the battle and make the Chipettes perform at the new concert, opening for Britney Spears. Since Ian wants more focus on Brittany, he demands Brittany perform on stage alone while Jeanette and Eleanor sing back up. When Brittany refuses to sing without her sisters, Ian threatens to send them to a barbecue restaurant for their insubordination.

At the school, Alvin gets a phone call from Brittany saying that Ian has locked her and her sisters in a cage, so Alvin races off to rescue them while Simon tells Jeanette how to open the cage on the phone, the Chipettes manage to escape with Alvin, and Brittany reconciles with Alvin for not listening to him about Ian. Alvin and the Chipettes arrive just in time to perform at the contest. The Chipmunks and the Chipettes perform together and they win. Meanwhile, Ian gets into more trouble at the concert he set up for the girls when he attempts to imitate them, and in a post-credits scene, he ends up in a dumpster. Dave returns during the contest and allows the Chipettes to stay with them.