Erik, son of the penguins Mumble and Gloria, is unable to dance like Emperor-Land. Erik and his two best friends, Bodicea and Atticus, follow Ramon to Adélie-Land and find that Adélie-Land has been ruled by a God-like “penguin” named Sven. Sven is actually a puffin in Adélie-Land who survived the loss of his native fishing grounds due to his “miraculous” ability to fly. Erik instantly becomes enamored with Sven, who takes a liking to him. Sven and Lovelace tell the others that they were saved by humans. The two eventually flee (under Sven’s mistaken assumption that the humans were going to eat them) and end up on Antarctica, where Sven performs his first miracle by revealing moss to the local penguins. Sven uses his power of “Sven Think” to help Ramon find a mate. Ramon instantly falls in love with Carmen, another Adélie penguin who is uninterested. Mumble follows the chicks’ footprints to Adélie-Land and orders them to return to Emperor-Land, but they refuse. Sven sends Erik back to Emperor-Land with Mumble.
Meanwhile, a couple of krill are in the midst of a swarm. Will is an adventurous and existentialist krill determined to discover what lies beyond the swarm. His friend, Bill, reluctantly follows him to ensure his safety. Once separated from the swarm, Will and Bill realize that krill are at the bottom of the food chain, created to be eaten. Inspired, Will ventures out to evolve and “move up the food chain” by eating a real creature instead of being eaten.
Mumble tells Erik that he is unique to the world and that he will someday find his calling, but Erik is oblivious. While trying to cross a perilous ice bridge, the penguins encounter Bryan the Beach Master and his two young sons, who refuse to let the penguins pass. Suddenly the ice gives away and Bryan is trapped in a deep crevice below the ice. Mumble sets out to free Bryan by luring a leopard seal to chase him down. Seeking acceptance from Erik, Mumble is devastated to learn Erik attributed the feat of courage to Sven Think. Bryan returns to the southern elephant seal beach.
When the penguins return to Emperor-Land they discover that a large iceberg has trapped the emperor penguin population below large walls of ice. Bo ventures out to Adélie-Land to recruit the help of Ramon, the Amigos and the Adélie penguins to bring fish to the doomed Emperor penguins. Meanwhile, Mumble, Erik and Atticus deliver meager supplies of fish to the trapped penguins. Erik attempts to deliver a fish to Gloria by flying and nearly tossing himself over the edge of the iceberg. Mumble scolds Erik for his beliefs, saying that no penguin can fly and that none of the emperor penguins will be able to escape. Once Erik realizes Emperor-Land is destined to die, he begins to break down. Gloria sends Mumble off to hunt for fish, calming Erik and the rest of the hysterical Emperor-Land. In the process, Bill becomes inspired to create another swarm of krill but Will refuses, preferring to adhere to his new predator lifestyle.
The next morning, a large flock of skua attack the trapped Emperor-Land. Noah the Elder encourages the penguins to stand up to the birds through perseverance and unity. When all hope seems lost, Bo returns with the entire Adélie-Land, led by Sven, to aid the trapped emperor penguins. Sven orchestrates a cooperative effort to feed the trapped emperor penguins through hunting and bringing back a flow of fish from the sea. Meanwhile, Will becomes increasingly agitated with Bill’s behavior and leaves him into the Adélie feeding swarm, to join “fellow predators”. In the process he is attached to a fish carried by Sven and down into the trapped Emperor-Land.
The humans that saved Sven and Lovelace come to Antarctica again to help the penguins find a way out. However, a blizzard approaches and causes the humans to flee and not return. Sven reports that the ocean has frozen over significantly and there is no chance of the humans returning or the Adélie penguins transporting food over such a distance. Erik urges Sven to teach the penguins how to fly, but Sven reveals that he is not a penguin but a puffin. He admits that after the loss of Svenland, he was lonely and grew to love the penguins who accepted him as a family. Mumble, after watching snow fall into a crevice between chunks of iceberg, begins to tap-dance on the ice and lead the Adélie penguins in a dance to force snow between the ice and weaken it. The plan works until several chunks break loose, sending Bo, Atticus, and a portion of the Adélies as well as several chinstrap, little blue and Magellanic penguins into the doomed crevice. Erik and Lovelace tumble towards the edge, and Mumble grabs the thread from Lovelace’s vest. The thread snaps and Lovelace falls on Sven. Mumble and the Amigos pull on the thread that Erik is holding onto and pull him up but Mumble injures his foot, unable to dance and lead the Adélies. Ramon realizes Carmen is trapped below and, risking his own life, jumps off the iceberg to be with her and professes their love to each other. Sven becomes aware of the dancing and proves himself to be a worthy dancer despite public outcry against him. He leads the remaining Adélies in dance while Erik and Mumble venture off to the elephant seal beach.
Meanwhile, Will, weary from the dangers he experienced as a predator on the surface, ventures back into the sea to find Bill, but not before experiencing the penguin’s dancing. He is suddenly forced down a crack in the ice and into the sea beneath Emperor-Land. Reuniting with Bill and his swarm, the krill enter the inaccessible ice below Emperor-Land.
Mumble and Erik arrive at Elephant Seal Beach where Bryan is in the middle of a fight of dominance between another large male. Mumble pleads to the elephant seals to help free the emperor penguins. Hesitant to return a favor at such a pivotal time of the year, Bryan declines. Using his singing abilities, Erik commends Mumble for his bravery and lectures Bryan for his lack of kindness. The elephant seals travel en-masse to Emperor-Land. The penguins and the seals begin slamming the ice on the beat, joined by Will, Bill and their krill swarm below the ice. Finally, the iceberg crumbles enough for the emperor penguins to climb out of the crevice and reunite with their families.