Plot
In the South Pole, Bill Barnacle, his first mate Sam Sawnoff a penguin, and crewman Buncle a wombat, are shipwrecked after their ship is destroyed by a big wave. After Bill stops a starving Buncle from eating Sam, the iceberg cracks and produces an everlasting magic bowl of pudding. Buncle runs off with the pudding and claims it as his own, but the ice breaks and he falls into the sea. Bill and Sam manage to rescue the pudding, and after briefly mourning the apparent loss of Buncle, they choose to become the Pudding Owners dedicated to protecting it from thievery. The pudding is revealed to be alive and named Albert, who has a rude demeanor and demands that they continue to eat him.
Ten years later, a young koala named Bunyip Bluegum discovers that he is not an orphan and sets out on a quest to find his parents, Meg and Tom Bluegum. During his journey, he stumbles upon Bill and Sam and accidentally foils an attempt to steal Albert by two pudding thieves. Bill and Sam introduce each other to Bunyip and also introduce Albert, who reveals he's a thrill-seeker who often runs away to challenge other animals to try and eat him. Bunyip tries to ask a bandicoot with a watermelon for help in finding his parents, and the bandicoot tells Bunyip that the only one not afraid to reveal the answer is a frog on the log. Shortly after, Bunyip helps Bill and Sam foil another attempt by the pudding thieves to steal Albert, and Bill and Sam officially welcome Bunyip to the Pudding Owners group while explaining their history, and the four go together to find Bunyip's parents.
Meanwhile, Buncle is revealed to be alive and living underground, having enslaved a valley into bringing him food while still desiring to take Albert for himself. He is also revealed to be the one who has sent the pudding thieves, his nephew Watkin and his friend Patrick O'Possum, to bring him Albert, and it's also shown that among the enslaved citizens are Meg and Tom Bluegum.
After foiling another attempt by the thieves to steal Albert, Bunyip falls into a creek where he dreams/hallucinates about his parents, before meeting the frog on the log. The frog tells him to solve a riddle to find the place where they were last seen, "Where two gums meet, yet stand alone, there's plenty of water, but dry as a bone". Later, the pudding thieves finally succeed in stealing Albert by starting a fire as a distraction, but the Pudding Owners find their house and eventually rescue Albert.
Albert mocks Bunyip's desire to find his parents, causing Bunyip to lose his temper and kick Albert into two interwoven trees. There, they discover two gum trees overlooking a valley with a dam that feeds water into Tooraloo, solving the frog's riddle. As the Pudding Owners head to the town, the thieves open the dam, flooding the town, but Bunyip uses Albert to fill sacks and make a dam. The grateful residents celebrate, and when Bunyip explains his quest, the townspeople take them to the entrance of Buncle's underground lair, saying no one ever comes out. Bunyip begins to despair of ever finding his parents, but Albert slides down inside in his bowl, followed by Bunyip, Bill and Sam. Inside, Buncle is berating the thieves for their failed attempts, when Albert bounces into his lap. Buncle has the thieves thrown in with the slaves before celebrating the capture of the pudding with a large party.
During the party, Bunyip and Bill free the slaves, including Meg and Tom, while Sam distracts Buncle by dressing as a woman. After they escape, Bunyip finally recognizes his parents, and they share a warm reunion, before Bunyip goes with Bill and Sam to rescue Albert from Buncle. As Buncle tries to eat Albert, Bunyip, remembering that Albert can change his pudding forms whenever somebody demands it, demands Albert for a double serving, intending to give Buncle the double. As Albert splits, his good and evil half fight, quickly growing bigger until breaking out of the cavern. Buncle then demands for 'all the puddin's in the world', only to fall into one of the Albert's mouths and is spat far away. Albert splits into millions of puddings before turning back to normal and falling back into his bowl, apparently dead. Everyone begins to mourn, until Albert wakes up, and everyone rejoices.
Later, Bill, Sam and Albert are living a new life with the Bluegums, as well as Rumpus and Wattleby, the ones who raised Bunyip during his childhood. Bunyip breaks the fourth wall by inviting the viewers to join them for a slice of pudding, unless they happen to be a "pudding thief", while the Pudding Owners foil yet another attempt by the two pudding thieves to get Albert for themselves.
In a mid-credit scene, Buncle is shown to have crash-landed back in the South Pole, where he lands on a floating ice block. He bemoans his failure to capture Albert before falling unconscious as the ice block carries him away.
