The story of this film begins when an Heiress living in Beverly Hills named Vivian Ashe has to go on a business trip to Europe. She contacts her niece Rachel to take care of her pet Chihuahua named Chloe. While Chloe is relaxing at the pool, she encounters a male Chihuahua named Papi who is the pet of the local landscaper. Chloe is constantly rejecting him out of her own reasons, mainly out of her lifestyle among the elite of Beverly Hills. Shortly after Rachel is settled in, she gets a call about going on a trip with her friends to Mexico.
Out of sheer irresponsibility she takes Chloe with her to Mexico, unaware of the hidden dangers. After Rachel checks into a hotel leaving Chloe by herself, that is where all of the trouble starts when Chloe gets abducted. Already in Mexico with his master, Papi decides to look for help from some of the local animals including a retired German Shepherd named Delgado. Both dogs are on the trail of the men who abducted Chloe only to discover she has been sent to a ring of illegal dog fight promoters.
Thinking quickly, Delgado picks the locks on the cages freeing Chloe, plus the other dogs being forced to fight in the ring. He also picks the lock on the dog ring itself to aide in the escape of Chloe.
Now Papi and Delgado plan to take Chloe to find Rachel, so that she can take Chloe up north back to California. Unaware that Rachel has posted a reward for finding her aunt's Chihuahua, the leader of the dog fight ring and his canine companion El Diablo track Papi, Chloe and Delgado to some uncharted region of the Mexican desert. Where in a final showdown, Chloe finally discovers what it means to be a Chihuahua. Later she returns home along with Papi to begin her new life.