The wealthy Mrs. Teasdale (Margaret Dumont) insists that Rufus T. Firefly (Groucho) be appointed leader of the small, bankrupt country of Freedonia before she will continue to provide much-needed financial aid. Meanwhile, neighboring Sylvania is attempting to annex the country. Sylvanian ambassador Trentino (Louis Calhern) tries to foment a revolution and to woo Mrs. Teasdale, and he tries to dig up dirt on Firefly by sending in spies Chicolini (Chico) and Pinky (Harpo).
After failing to collect useful information against Firefly, Chicolini and Pinky are able to infiltrate the government when Chicolini is appointed Secretary of War after Firefly sees him selling peanuts outside his window. Meanwhile, Firefly’s secretary, Bob Roland (Zeppo), suspects Trentino’s motives, and advises Firefly to get rid of Trentino by insulting him. Firefly agrees to the plan, but after a series of personal insults exchanged between Firefly and Trentino, the plan backfires when Firefly slaps Trentino instead of being slapped by him. As a result, the two countries come to the brink of war. Adding to the international friction is the fact that Firefly is also courting Mrs. Teasdale, and, like Trentino, hoping to get his hands on her late husband’s wealth.
Trentino learns that Freedonia’s war plans are in Mrs. Teasdale’s safe and orders Chicolini and Pinky to steal them. Chicolini is caught by Firefly and put on trial, during which war is officially declared, and everyone is overcome by war frenzy, breaking into song and dance. The trial put aside, Chicolini and Pinky join Firefly and Bob Roland in anarchic battle, resulting in general mayhem.
The end of the film finds Trentino caught in a makeshift pillory, with the Brothers pelting him with fruit. Trentino surrenders, but Firefly tells him to wait until they run out of fruit. Mrs. Teasdale begins singing the Freedonia national anthem in her operatic voice and the Brothers begin hurling fruit at her instead.