Sherlock Gnomes and his assistant, Dr. Watson, storm London’s natural history museum where their nemesis, a pie mascot named Moriarty, is holding gnomes hostage. After a brief battle, Moriarty is seemingly crushed by a dinosaur skeleton.
Meanwhile, now happily in love Miss Montague, Mr Capulet and the gnomes move from Stratford-upon-Avon to London, where their garden looks uglier than the other garden. Lady Bluebury and Lord Redbrick announce their retirement and appoint Gnomeo & Juliet as new leaders. The couples’s relationship starts to shake when Juliet becomes stressed and obsessed with the garden, ignoring Gnomeo. In a bid to get her attention, Gnomeo decides to get a Cupid’s Arrow orchid for the new garden so Benny shows Gnomeo the closest flower shop in town from an old computer. When Gnomeo gets the orchid in the shop, the burglar alarm goes off after a falling stall, causing Juliet to rescue him. Once out, the couple have a heated row and Juliet angrily tells Gnomeo “The garden can’t wait but you can.” A signal on the walketalky comes through of Benny saying that there is a monster in their garden. When they get back, the gnomes are all gone and Sherlock and Watson arrive and find a clue card.
A clue from Moriarty, whom Sherlock believes survived their last encounter, leads them to Chinatown. They find the next clue at Curly Fu’s Emporium, and escape a group of guards like black cats whom Sherlock had previously offended. They arrive back at the natural history museum, where Gnomeo suggests they look inside but Sherlock decides to wander an art gallery instead, followed by Juliet. Gnomeo goes into the museum anyway with Watson in pursuit, only to be kidnapped by a gargoyle who seemingly smashes Watson (off screen). Gnomeo is brought to the rest of the gnomes and informed they will be smashed during a fireworks celebration the following evening. Meanwhile, Sherlock figures out the next clue is at the royal park. He and Juliet disguise themselves as a squirrel to get the clue from a dog, and manage to evade the dog on a lawnmower.
Gnomeo attempts to free the gnomes, but only he and the Red Goon Gnomes are able to escape before the gargoyles arrive. The next clue leads Sherlock and Juliet to a doll shop where they meet his resentful former fiancée, Irene, who kicks them out, but allows Juliet back in after she distances herself from Sherlock. Irene gives Juliet the clue, which leads her and Sherlock to Traitor’s Gate at the Tower of London. They discover Watson, apparently the true mastermind, who reveals that he pretended to be Moriarty to get through to Sherlock, who did not respect or show appreciation for him, and supposedly has the gnomes in custody, only to find them all missing. The Gargoyles reveal that they never worked for Watson, and dispose of Sherlock, Watson, and Juliet on a ship.
Sherlock realizes the gnomes are being held at the bottom of the Tower Bridge with pie filling, and Moriarty appears, revealing that he really was behind everything and plans to smash the gnomes with the raised bridge. After witnessing Sherlock’s mistreatment of Watson, he had the Gargoyles feign allegiance with Watson to access his map and identify the location of every gnome in London. Sherlock and Watson agree to work together a final time to save the gnomes, and they and Juliet head to the bridge on a drone.
Gnomeo manages to stall the bridge opening with the Red Goon Gnomes dancing, reunites with Juliet and together they defeat the Gargoyles. Although Watson frees the trapped gnomes with soap, Moriarty pursues Sherlock, and attempts to kill everyone, but Sherlock throws him over the bridge and into the river, and Watson narrowly saves him with his cane grappling hook, whereupon Moriarty helplessly floats away. Afterward, the gnomes enjoy the fireworks.
The following spring, Gnomeo and Juliet take charge of the garden, and the gnomes celebrate with Irene and the cat guards in attendance. Sherlock and Watson leave for another adventure.