At the beginning of the film, protagonist Mick Dundee is living in the Australian Outback with Sue Charlton and their young son Mikey. Crocodile hunting has been made illegal; therefore Mick has been reduced to wrestling crocodiles for the entertainment of tourists, having as his rival in the business another Outback survivalist named Jacko (Alec Wilson). When an opportunity comes for Sue to become Los Angeles bureau chief of a newspaper owned by her father, Mick and his family cross the Pacific to California. In America, Mick and his son's encounters with the locals cause cross-cultural mishaps. Mick becomes an amateur sleuth helping to probe the mysterious death of his wife's predecessor at the newspaper, while Mikey attends a local school, where he quickly impresses his classmates and teacher with his outback survival skills. It is revealed that a film studio that the dead reporter had been investigating is about to make a sequel to the action movie Lethal Agent, despite their previous failures. Mick becomes suspicious when several paintings from Southern Europe are brought onto the set; although at first he suspects drug smuggling, the pictures themselves are revealed to be missing art from a museum in former Yugoslavia. They are to appear in the movie as mere props, to be publicly 'destroyed' in a scene in which they are set on fire, at which time they will have been exchanged for copies. Attempting to secure one of the paintings as evidence, Mick, Sue, and Jacko run afoul of the studio director and his thugs. Using the studio's props and two lions used in the filmings to defeat the gangsters, Mick and Sue solve the case and return to Australia, where they are officially married. Jacko brings Mikey's teacher with him.