The film is told through the perspective of Timon and Pumbaa through the literary device known as a frame story. The two are shown watching the original film, The Lion King, being shown in silhouette commenting on the movie being shown before them, in a style nearly identical to that of Mystery Science Theater 3000.
They quickly stop the film and rewind it so they can show their side of the story, occasionally stopping the footage to talk with one another (and at one point, Pumbaa accidentally changes the channel). Timon shows Pumbaa the meerkat’s backstory, revealing him to be an outcast in his colony on the outskirts of the Pridelands. While supported by his mother Ma, Timon (who unable to fit in with the others) wished for more in life and left the colony after the meerkats and Uncle Max are nearly eaten by hyenas Shenzi, Banzai and Ed, and Uncle Max is happy he left. He meets the mandrill Rafiki who advises him to find his place in the world via Hakuna Matata and to “look beyond what you see”. After observing Pride Rock in the distance and deciding to venture there, Timon wanders into some long grass and meets Pumbaa for the first time, both becoming friends very quickly.
The pair arrive at Pride Rock during Simba’s presentation to the Pridelands’ animals. However, Pumbaa informs Timon that he gets anxious in crowds and passes gas explosively that knocks some of the animals out, making the rest of them kneel. Timon (who doesn’t mind this) realizes this is Pumbaa’s “special power” that makes him drive animals away, which they had briefly mentioned upon first meeting. Timon and Pumbaa then look for several other places to live, intersecting with important events in the film. They are eventually caught in the wildebeest stampede that takes the life of Mufasa, but survive after falling down a large waterfall and find a vast jungle which they decide to make their home. Timon then learns of Pumbaa’s own philosophy of Hakuna Matata, embracing it to his fullest. However, one day the two find Simba and raise him as their own despite the negative effects of Hakuna Matata.
Years on, Nala appears after chasing Pumbaa and reunites with Simba. Timon and Pumbaa attempt to prevent the two lions from getting together, but ultimately fail in their plan. They then spot Simba running away after his off-screen argument with Nala, and Timon celebrates, with Pumbaa feeling guilty. Later, Nala appears explaining to the two of them where Simba has gone, after Rafiki had explained he had run off to challenge Scar. After Nala goes to follow Simba, Pumbaa argues with Timon, who is angry that Simba had left them and selfishly declares he has everything he wanted in the jungle, but when Pumbaa leaves, loneliness starts to overcome him. Rafiki appears to Timon but the meerkat prevents him from talking and whilst pretending to have a conversation between himself and the mandrill whom he mimics, Timon realizes his Hakuna Matata is not a home but friendship, prompting him to go after his friends.
Timon reconciles with Pumbaa and they forgive each other, before then journeying on to Pride Rock. After helping Simba and Nala, Timon and Pumbaa evade the hyenas and run into Ma and Uncle Max who came looking for Timon (after Ma met Rafiki earlier in the film). Wanting to help Simba, Timon proposes that they get rid of the hyenas by using tunnels. Whilst Simba fights Scar, Ma and Uncle Max construct a series of tunnels beneath them, and Timon and Pumbaa use various tactics to distract the hyenas. When the tunnels are finished, Max quickly knocks down the sticks keeping them from caving in; however, the last few get stuck and the plan fails. Cornered once again by the hyenas, Timon dives underground and whilst the hyenas approach Ma, Uncle Max and Pumbaa, he quickly hurries and breaks the remaining sticks, saving his family and Pride Rock. Immediately afterwards, Scar is thrown off of Pride Rock by Simba and falls into the same location as the hyenas, who kill him for betraying them. Simba accepts his place as king of the Pride Lands, thanking Timon and Pumbaa for helping him. Timon takes Ma, Uncle Max and the meerkat colony to live in the jungle, realizing his true Hakuna Matata is family. The meerkats and Pumbaa celebrate with Simba, praising Timon as their hero for finding them a safe, beautiful haven and forever ridding them of the hyenas. In the final scene of the film, Ma, Uncle Max, Simba, Rafiki and many other silhouetted Disney characters (who don’t belong in the movie) join Timon and Pumbaa to re-watch the film in the cinema. As the film fades to black, Pumbaa then informs Timon he still grows anxious in crowds, ending the film.