A young and lonely Shaggy Rogers befriends and adopts a talking stray dog, whom he names Scooby-Dooby-Doo. On Halloween night, Scooby-Doo and Shaggy meet three young detectives named, Fred Jones, Daphne Blake, and Velma Dinkley, before venturing into a haunted house. Inside, the kids encounter a ghost, whom they capture and unmask as costumed thief Mr. Rigby. Inspired by the experience, they decide to form a group, Mystery Inc., to solve mysteries together.

Ten years later, Mystery Inc. goes into business with entrepreneur Simon Cowell as their investor, but Shaggy and Scooby are excluded as Cowell refuses to do business with them, forcing them to quit Mystery Inc. as the gang feel disheartened. Later that night, Shaggy and Scooby are attacked at a bowling alley and chased by small robots called Rottens. The pair are rescued by Dee Dee Skyes, Dynomutt, and the masked superhero, Blue Falcon. The Rottens are then revealed to belong to supercriminal Dick Dastardly who wants to capture Scooby as part of a plan involving the mystery behind the three skulls of Cerberus.

Meanwhile, Fred, Daphne, and Velma discover that Shaggy and Scooby are with Blue Falcon before Dastardly is revealed to be Officer Jaffe in disguise and then imprisons them. Escaping with the help of one of the Rottens, they make contact with Dee Dee via Dynomutt. Velma explains that she and the others are being taken to Messick Mountain, where the last skull is located. The group then finds out Dastardly’s plan is to open the gates to the Underworld in order to rescue his dog Muttley, who was trapped during an attempt to steal the Underworld’s riches, and Dastardly needs Scooby-Doo because only he can unlock the gates.

Blue Falcon, Scooby, Dee Dee, and Dynomutt arrive at Messick Mountain and head underground to a hidden Mesozoic island. There they find the last skull being guarded by Captain Caveman. Following a short battle, Fred and Shaggy arrive, but Fred is revealed to be Dastardly in disguise as he steals the last skull. The Rottens then throw the real Fred, Daphne, and Velma out of his airship and Dastardly destroys the Falcon Fury. Dastardly then captures Scooby and takes him to Athens. Fred and Blue Falcon argue while Velma, Daphne, Dee Dee, and Dynomutt try to break them up, but Shaggy stops their argument and takes the blame for Scooby’s capture after letting his jealousy strain their friendship. After Shaggy gives an inspiring speech, everyone works together to reconstruct the Mystery Machine in order to pursue Dastardly.

Arriving in Athens, Dastardly uses the three skulls to reveal the gate to the Underworld and attempts to use Scooby’s paw to open it, only to be interrupted by Scooby’s friends in a flying Mystery Machine. The Rottens shoot them down while Dastardly releases Cerberus; unaware that Dynomutt landed them safely. As Scooby, Dastardly, and the civilians flee from the rampaging Cerberus, Scooby runs to the crash site and reunites with his friends while Dastardly reunites with Muttley in the Underworld and they escape after stealing some of Alexander the Great’s treasure. While determining how to trap Cerberus, Velma discovers more of the mystery behind Scooby’s ancestry and its connection to the Underworld. With help from the Rottens, Mystery Inc. and friends trap Cerberus and put him back in the Underworld. However, Shaggy sacrifices himself to lock the gate. The gang realizes that there is another exit, which Scooby unlocks, and Shaggy is reunited with them.

The Rottens turn on Dastardly and Muttley, and Shaggy unmasks Dastardly who is revealed to be Simon Cowell in disguise. Upon realizing why it doesn’t make sense, Velma unmasks Cowell who is revealed to be Dastardly in disguise the whole time trying to demoralize the gang and break the team up. Dick Dastardly and Muttley are both taken into custody by Blue Falcon, Dynomutt, and Dee Dee, and are arrested.

Back home at Venice Beach, the gang unveils their new Mystery Inc. headquarters and celebrates with Blue Falcon, Dynomutt, and Dee Dee, who in turn give the gang an upgraded Mystery Machine before Scooby and the gang head off to solve another regular mystery together again.

During the credits, the Mystery Gang’s popularity rises and they are seen consulting Dr. Benton Quest after leaving the Rottens in his care, Blue Falcon and Dynomutt form the Falcon Force with new members Captain Caveman, Jabberjaw, Atom Ant, and Grape Ape while Muttley breaks Dastardly out of prison.