Plot
Dogs and cats are secretly highly intelligent, capable of speech, and maintain spy agencies to protect the world. In Germany, a bloodhound named Rex discovers a Cocker Spaniel puppy stealing secret codes. The thief reveals herself to be Kitty Galore, a hairless Sphynx cat, in disguise. After she escapes, Rex alerts the agents that he has spotted her. At a San Francisco used car dealership, the mascot Crazy Carlito (dressed like Uncle Sam) plans to bomb the building. Police officer Shane Larson and his dog Diggs arrive on the scene. Diggs recklessly retrieves the detonator from Carlito but bites it in the process, blowing up the building. Butch and Lou, now a fully grown Beagle and the head of D.O.G. HQ, watch the incident. Lou wants to recruit Diggs as an agent, and Butch reluctantly agrees.
Diggs is locked in the police kennels to prevent further accidents. Butch brings him to D.O.G. HQ. After tracking down a pigeon named Seamus with valuable information, Diggs and Butch meet a M.E.O.W.S. (Mousers Enforcing Our World's Safety) agent named Catherine, who is also in pursuit of Seamus. Catherine reveals that Kitty Galore is a former M.E.O.W.S. agent named Ivana Clawyu who fell into a vat of hair removal cream in a cosmetics factory when a guard dog chased her while on a mission. Humiliated by her fellow agents, Kitty left M.E.O.W.S. and, thrown out by her former family due to her appearance, vowed revenge on cats, dogs and humans.
Lou forms an alliance with Tab Lazenby, head of M.E.O.W.S, to take down Kitty Galore. At a cat lady's home, the team discover that Calico, Mr. Tinkles' former aid, has been sending stolen technology to Kitty via pigeons. Diggs attacks Calico, who tries to drown the team in cat litter. They escape and interrogate Calico, who claims not to know Kitty's whereabouts but does know where his former boss is.
The team travels to Alcatraz, where Mr. Tinkles, mentally ill from his time with Mr. Mason's maid and her sisters, is confined. While he refuses to directly help them, he provides one clue: "A cat's eye reveals everything." When Kitty Galore learns that the cats and dogs have joined forces, she hires mercenaries Angus and Duncan MacDougall to kill Seamus on the boat returning from Alcatraz. Diggs subdues Angus and accidentally throws him overboard. Fed up with Diggs' mishaps completely ruining the mission, Butch dismisses him from the team and leaves with Seamus to salvage clues.
Catherine takes Diggs to her home where he meets her nieces who tickle his tummy. He's surprised they do not hate him as a dog, Catherine says they have not learned to hate dogs yet. He reveals that past experiences have made him unable to trust anyone, leading to difficulty following orders and spending most of his life in kennels. Catherine assures him if he continues to think that way, no one will be able to help him. Diggs realizes his error, and follows Catherine to M.E.O.W.S. HQ, where they learn with help from the clue Mr. Tinkles gave them that Kitty is hiding at a fairground with her new owner, amateur magician Chuck the Magnificent.
At the fair, Diggs and Catherine are captured by Kitty and her assistant, Paws. Kitty reveals her plot to transmit the "Call of the Wild", a frequency only dogs can hear that will make them hostile to humans. Kitty believes humans will abandon these unwanted dogs in kennels. Kitty tries to use the fair's flying swings ride as a satellite dish to broadcast the signal to an orbiting satellite. Diggs and Catherine escape after Diggs confess his feelings to Catherine and Catherine overcomes her tearful fear of water to rescue him from drowning and are joined by Butch and Seamus. Seamus presses a red button, believing it will shut down the ride, but he instead activates Kitty's signal. Dogs around the world begin to react. Paws battles them, revealing he is a robot; Diggs tricks him into biting the device's wires, destroying the satellite. Kitty's pet mouse Scrumptious, fed up with Kitty's abuse, launches the cat, leaving her covered in cotton candy and landing in Chuck's hat. With the mission a success, Diggs goes to live with Shane. Upon returning to H.Q., Diggs learns Mr. Tinkles has escaped prison with Calico.
In a post-credits scene, Tinkles is in paradise complaining about lacking deworming cream for his itching rear until Calico reminds him that he is still connected.
