The film starts with a group of babies in a day care centre...or something. Archie tells the others (Finkelman, Alex, and Rosita) a story about a super baby called Kahuna. Kahuna rescues kids all around the world. According to Archie, Kahuna rescued a group of children from an orphanage run by the evil (and unbelievably stereotypical) Kane. Kahuna and Kane are archnemesis' and hate each other, but Kahuna always wins their battles.
Archie's father Stan, who seems to own the day care centre, is letting it be used as a television set by the evil Biscane (yes, in other words, Kane) who is starting up his own TV channel. Archie notices someone spying on the goings-on at the television set in the bushes, but he isn't sure who it is. However, he begins to believe Biscane is evil. Him and the other babies sneak into Stan's office and decide to check out Biscane, but are spammed. When they hear some of Biscane's cronies approaching, Rosita, Alex and Finkelman run away, leaving Archie by himself. Archie overhears the cronies talking about Biscane's plan, but he doesn't really understand it. However, he accidentally attracts their attention, but before they can get him, he is rescued by, you've guessed it, Kahuna, who is in fact REAL. (Of course.) But then Kahuna leaves and the other babies don't believe Archie.
Kylie, Archie's older cousin and Stan's neice, takes them all out to the chidren's museum, but not before bumping into a cronie (who everyone thinks is the film crew) and a disc falls into the pushchair. On the way to the museum they are stopped by loads of Biscane's other cronies. But Kahuna rescues them all, and the babies realise that Archie was telling the truth. Kahuna takes them all to his base in Hollywood, where they meet Zack, whom Kahuna took in years ago. Kahuna's base is in fact a huge playground, and Kylie finds it...weird. (Which it is.) Kahuna transforms the babies into superbabies: Archie is brain boy, Alex is bounce boy, Rosita is Cupid Girl, and Finkelman is Courage boy. But they don't think these super alter-egos fit their personalities, and they tell Kahuna to change them back to normal. Which he does.
After convincing Stan and Archie's mother that they (Kylie and all the baies) are okay, Archie asks Kahuna to tell him where he got his powers from. But he refuses...so Archie eavesdrops on Zack and Kylie. Zack tells Kylie that Kahuna's father was a scientist and developed a formula of some sort, which Kahuna drank, and he was transformed into a super baby, but he is stuck as a child forever. (In other words, he's about 70 but stuck in the body of a 7 year old.) Kahuna's brother didn't like it that everyone thought he and his family were freaks. When the father died, despite Kahuna being 18, he was put into an orphanage, but he escaped, and set out to rescue babies and children everywhere, and in the words of Zack, "a legend was born." (As you can see, not cheesy at all.)
The next day, Zack and Kylie find the disc that magically managed to travel from the pushchair into Kylie's bag...(or at least that's what it looked like to me.) Zack gives it to Kahuna. Then Zack and Kylie go for a picnic on the hills and they kiss, when Zack gets a message from Kahuna. On the disc is a clip of the programme that is to be aired on Biscane's TV channel, followed by lots of seemingly random code. They FINALLY realise that Biscane is up to no good, and set out to see what is going on.
Zack, posing as a policeman, and the babies, watch as Biscane counts down til his channel is to be aired on TV. But Kahuna, who has worked out his plan to control the world (there's a new one) stops him and destroys the satellites- before disappearing. (Oh no.) Archie and the other three don't know what to do- they think they can't go on without Kahuna. But in fact, all they need to do is believe in themselves. They all decide to go and become their super alter-egos-for Kahuna. (As I've said before, not cheesy in the slightest.) With Stan, Archie's mum, Kylie and Zack with them, they return to Kahuna's hideout and become Bounce Boy, Cupid Girl, Brain Boy and Courageous Boy.
Then Kahuna arrives, followed by Biscane and his cronies. But after defeating all the cronies, Biscane still gets the disc he needs and begins to air the TV clip on TV. It's also revealed that he is Kahuna's older brother (plot twist of the century) and he hates Kahuna for being their dad's favourite. Now Kahuna and Biscane have always been fighting, ever since Kahuna escaped from the orphanage- Biscane always wanted to be young forever, that's why he hates children, and Kahuna needed to save all the children from his evil brother.
Anyway, the babies kick Biscane into the...thing resembling a carousel that transformed them into their super selves and he, wanting to become everything he's ever wanted, presses a button that wasn't there before and becomes a baby, much to his despair. But "thankfully" his cronies promise to look after him.
Kahuna reverses the transmission posing as the TV clip Biscane is airing and all the children decide to run outside and play tag. Yes, apparently every child in the world starts playing tag. Now that their work is done, Kahuna tells Archie that he must go and though they'll always be friends, Archie must stay with his family and Kahuna must go and save kids.
In the ending scenes, Zack meets his mother (Kahuna had rescued him from...somewhere but Kahuna could never find Zack's parents, so that's why he took him in to live with him.) Zack and Kylie are dating, apparently, and Archie, running outside, sees Kahuna in the flying vehicle who waves at him and yells something about he'll always be a hero. The film ends (thankfully) with Archie waving at the sky and audience members crying in their seats.