The plot follows Art Chew's (a pun of the sound one makes when sneezing) quest to retrieve the ancient peach. The movie starts with Art Chew traveling to America, as well as showing Art's training at the Shur-li temple (a play on words with the child actor Shirley Temple), showing many kung-fu clichés such as grabbing the pebble from the masters hand (which Art succeeds without effort), fighting on trees in this case small potted palms and "listing" for elements (Earth, Wind and Fire play a funky tune). After the montage is shown Art meets up with his cousin Wayman (A parody on the way Chinese pronounce r as w) a Chinese adult who tries to act American so he isn't embarrassed by stereotypes and foster cousin Roy Lee, an African American who sincerely believes he is a reincarnation of Bruce Lee.

When vengeful General Francis X. Hummel seizes control of Alcatraz Island and threatens to launch missiles loaded with deadly chemical weapons into San Francisco, only a young FBI chemical weapons expert and notorious Federal prisoner have the stills to penetrate the impregnable island fortress and take him down.