Watch Super Mario Bros.

The story concerns Mario Mario and Luigi Mario, two Italian American plumber brothers living in Brooklyn, New York who are being driven out of business by the mafia-like Scapelli Construction Company. Mario is the elder of the two, being close to the late 40s, and Luigi is about in his early-mid 20s. Luigi falls in love with an orphaned NYU student, Daisy, who is digging under the Brooklyn Bridge for dinosaur bones. After a date, she takes Luigi to the dig and witnesses Scapelli's men (who, along with Scapelli himself, had previously threatened her to end her research on that specific piece of land for their own interests) sabotage it by leaving the water-pipes open. Luigi tries to stop it but he does not have his tools on him so he can not fix it. They rush back to his apartment where they inform Mario about the incident. The three go back to the flooding and the Mario Bros. manage to fix it but are knocked out by two strange characters, Iggy and Spike. The two crooks kidnap Daisy.

Mario and Luigi awaken a minute later and head deeper into the caves following Daisy's screaming and discover an interdimensional portal through which Mario and Luigi follow Daisy. They find themselves in a strange dystopian parallel world where a human-like race evolved from dinosaurs rather than the mammalian ancestry of true humans. 65 million years ago a meteorite crashed into the Earth and in doing so ripped the universe into two parallel dimensions. All the surviving dinosaurs of the time crossed over into this new realm before being sealed there forever. Iggy and Spike turn out to be lackeys (and cousins) of the other world's germophobic and obsessive dictator, King Bowser Koopa, descended from the T-Rex. However, the two have failed to also bring Daisy's rock, a meteorite fragment which Koopa is trying to get in order to merge his world with the real world that separated from Koopa's world during the meteor strike. It turns out that Daisy is the princess of the other dimension but when Koopa overthrew Daisy's father (and turned him into fungus), Daisy's mother took her to New York using the interdimensional portal. The portal was then destroyed (killing Daisy's mother in the process), but when Scapelli was blasting at the cave, the portal was reopened. When Koopa hears about the re-opening of the portal, he sends Spike and Iggy to find Daisy and the rock in order to merge the dimensions and make Koopa dictator of both worlds. Spike and Iggy, however, who had grown more intelligent after being subjected to one of Koopa's experiments, decide to turn on Koopa and join forces with Mario and Luigi. Koopa thinks only Daisy can merge the worlds. It turns out Mario and Luigi were just in the wrong place at the wrong time. Lucky for Daisy, the plumbers were persistent in finding her.

During the big finale, the worlds merge, during which Scapelli gets his comeuppance when Koopa devolves him into a primate by mistake while aiming for Mario, but Luigi and Daisy take back the rock and the worlds separate. Mario gains his heroic courage and fights Koopa and eventually wins when he and Luigi devolve him, transforming him into a ferocious, semi-humanoid Tyrannosaurus. Koopa then leaps out for one last attack but Mario and Luigi devolve him into primeval slime, destroying him. The brothers save the two worlds from a cruel dictator and Daisy's father (Lance Henriksen) turns back to normal and reclaims control over the kingdom stating he "loves those plumbers". The citizens destroy anything involving Koopa. As the brothers return home, Luigi and Daisy admit their love for one another but Daisy cannot return to New York until the damage done by Koopa is reversed and she spends more time with her father. Mario rephrases Daisy's words to Luigi but he doesn't care. A deeply hurt and saddened Luigi passionately kisses her goodbye and the two Mario Bros. go back to New York, while Daisy, along with Yoshi and Toad, all watch them leave. About three weeks later, Daisy returns for Mario and Luigi's help in fighting more villains. Meanwhile, Mario and Luigi's story is televised, giving them their name "Super Mario Bros."

After the end credits, two Nintendo executives talk about a video game based on their adventures but they are asking Iggy and Spike instead of the Super Mario Bros. and they decide on a title called "The Super Koopa Cousins".