The film begins with Po helping his fathers, Mr. Ping and Li Shan, open their new restaurant. Master Shifu informs Po that he is to become the Spiritual Leader of the Valley of Peace and must therefore find a successor as a Dragon Warrior. Po has difficulty choosing, but at the same time catches the thief Zhen. Zhen tells Po about the Chameleon, a powerful sorceress who can transform herself into any animal. To stop the chameleon, Po wants to have one last adventure as a dragon warrior and asks Zhen for help to lead him to the sorceress. They travel to Juniper City, followed by Po's worried fathers...