Ford Fairlane is seen sitting on a beach smoking as the film opens. A flashback initiates, showing a roaring crowd at a concert given by fictional popular heavy metal band The Black Plague. Lead singer Bobby Black makes an eccentric entrance down a zip-line onto the stage and begins performing. Shortly into one of the band’s songs, Bobby Black collapses on stage and dies.
After the lead singer of The Black Plague is murdered onstage, shock-jock Johnny Crunch, an old friend who came west with Fairlane, hires Ford to track down a mysterious teenage groupie named Zuzu Petals, who may have a connection to Black’s death.
Soon after hiring Fairlane, Crunch is electrocuted on the air. The world’s hippest detective soon finds himself trading insults with ruthless record executive Julian Grendel, a clueless cop and former disco star, Lt. Amos, a merciless hit man named Smiley and countless ex-girlfriends out for his blood. Aiding and abetting Fairlane is loyal assistant Jazz and a hip record producer at the head of a bizarre lineup of suspects, victims, beautiful women, and a koala as he finds himself hip-deep in the case of his life.
The MacGuffin of the film is three data CDs which, when read simultaneously, detail the illegal dealings of Julian Grendel, who was getting rich from bootlegging his record company’s music and murdered Bobby Black when he found out Black had acquired the CDs with the incriminating evidence. Both of Fairlane’s beloved possessions, his house, and his car, are blown to bits, courtesy of Grendel.
The first disc was with Colleen Sutton, the second with Zuzu Petals, and the third disc was hidden under the star for Art Mooney on the Hollywood Walk of Fame.
It is later revealed that Grendel killed Bobby Black and Johnny Crunch, as he considered them both greedy and stupid because they wanted more money for their involvement in pirating CD’s to sell to the highest bidder, making the music industry corrupt. However, Fairlane kills Grendel by setting him on fire with a flammable alcoholic milkshake. Jazz leaves Fairlane, knowing how ungrateful he is for everything that has happened. Smiley shows up and plans to kill Ford, but not before revealing that he killed his young neighbor’s [the Kid’s] father. Ford distracts him and kills Smiley with a sleeve pistol. Jazz and Ford decide to reconcile, while the Kid decides to join their detective agency. Ford wins a million dollar radio contest and buys a yacht. He sails away with Jazz, the Kid and the koala bear. They’re all now one big happy family.