Plot

The story is set in the Valley of Peace, a fictional land in ancient China inhabited by anthropomorphic animals. Po (Jack Black), a panda, is a Kung Fu fanatic who idolizes the Furious Five, Tigress (Angelina Jolie), Monkey (Jackie Chan), Mantis (Seth Rogen), Viper (Lucy Liu), and Crane (Seth Rogan), a quintet of Kung Fu masters trained by the red Panda Shifu (Dustin Hoffman), who resides at the Jade Palace temple.

Helping his goose father Mr. Ping (James Hong) in his noodle restaurant, Po has been unable to achieve his dream of becoming a Kung Fu master himself. Po admires his Furious Five action figures. An extreme fan of Kung Fu, Po dreams of one day becoming a master worthy of fighting alongside the Five but his girth and clumsiness makes this dream simply a dream and his Kung Fu talents reside only within his knowledge of moves and artifacts. He is hesitant to express his desires to his dad who is more interested in running his restaurant and advertising his famous 'secret ingredient soup'.

Oogway (Randall Duk Kim), an old tortoise and Shifu's mentor, has a vision that Shifu's former student, the evil snow leopard Tai Lung (Ian McShane), will escape from prison and return to the Valley of Peace to take revenge for being denied the Dragon Scroll, which is said to hold the secret to limitless power.

Shifu is alarmed and sends his messenger, the goose Zeng (Dan Fogler), to strengthen security at Chorh-Gom Prison, where Tai Lung is held. Oogway then proclaims that it is time to choose the Dragon Warrior; a master of great skill who will be granted the secrets of the universe by reading the Dragon Scroll, kept delicately out of reach on the temple ceiling. Shifu then holds a Kung Fu tournament for the Furious Five so that Oogway may identify the Dragon Warrior, the one Kung Fu master worthy of receiving the Dragon Scroll and capable of defeating Tai Lung.

Flyers for the competition are spread throughout town and the villagers flock to the temple. Excited to have the opportunity to see his idols in person, Po follows with his noodle cart in tow but struggles on the long staircase to the temple. Po arrives as the arena doors close and is unable to enter. Desperate to see the Dragon Warrior chosen, Po straps himself to a set of fireworks, rockets into the sky, and crashes into the middle of the arena in front of Oogway's pointing finger. To everyone's surprise, Oogway proclaims Po as the Dragon Warrior. Oogway's decision is final, despite Shifu's protests, and Po is carried (unsuccessfully) into the temple leaving Tigress greatly disappointed since it seemed Oogway would have chosen her if Po hadn't arrived.

Believing Oogway's decision to be an accident, Shifu tries to dispatch Po by ridiculing him into quitting Kung Fu training. Inside the temple, Po examines, with awe, the many weaponry and valuable artifacts before Shifu approaches him and berates him for his obvious lack of skill. He deflates Po's excitement by grabbing his finger in what Po recognizes as the Wuxi Finger Hold, reputed to be extremely powerful. Shifu promises that Po will regret ever being chosen before taking him to the Fives training room where Po is promptly put to the test. Nervous, but excited to try some Kung Fu moves, Po accepts the challenge but is hurtled, flung, and beaten down to a now-existing Level 0.

The Furious Five similarly despise and mock Po as an upstart with no skill in Kung Fu. Disheartened, Po retreats to a secluded spot. Oogway finds him sitting beneath the Peach Tree of Heavenly Wisdom with peaches stuffed into his mouth. Sensing his distress, and noting that he finds comfort in food, Oogway tells Po that he worries too much about what was or what could be. He should instead focus on the present moment rather than doubting himself.

After receiving encouragement from Oogway, however, Po endures his grueling training and slowly begins to befriend the Five with his tenacity, culinary skill, and good humor. However, the Five become impressed by Po's fortitude and eventually start to warm up to him, with the exception of Tigress.

Tigress reveals that Shifu's toughness comes from his shame over Tai Lung's betrayal and having raised him as a cub. Having found him as a newborn on the steps of the temple, Shifu raised Tai Lung as his own and began to hope that he was the fabled Dragon Warrior when the cub displayed a natural talent in Kung Fu. However, when the time came to stand before Oogway, the grand master sensed darkness in Tai Lung and denied him the honor of receiving the Dragon Scroll. Enraged, Tai Lung went on a rampage through the village and attempted to take the scroll by force. Caring for him too much, Shifu was unable to fight Tai Lung and Oogway was forced to defeat him by blocking his Chi. Tigress then says that Shifu never cared for anything or anyone since, not even her, his own foster daughter.

Zeng arrives at Chor-Gom Prison and is escorted to Tai Lung's hold by the over-confident Commander Vachir (Michael Clarke Duncan), a rhinoceros. Vachir assures Zeng that the prison is inescapable as one of Zeng's feathers falls within reach of Tai Lung. Using his tail, he uses the feather to remove the Chi-blockers in the turtle-shell contraption on his back and break free. Tai Lung escapes the prison in an explosive display of his fierce Kung Fu abilities and grabs Zeng, instructing him to fly back to Shifu to announce that the real Dragon Warrior is coming home.

Shifu learns of Tai Lung's escape and informs Oogway, who extracts a promise from Shifu to believe in Po and then ascends to the sky in a cloud of peach blossoms from the Tree of Heavenly Wisdom. Shifu then tells Po and the Five about Tai Lung's escape and Oogway's death, claiming Po is the only one who can stop him. Horrified, Po runs away, but Shifu stops him. When asked why he stayed, Po admits he disliked his former self but believed Shifu could change him. Po then makes Shifu confess that he does not know how to train him as the Dragon Warrior. Tigress overhears and decides to stop Tai Lung herself.

Shifu, however, discovers that Po is capable of impressive physical feats when motivated by food. Shifu entertains an idea and tells Po where Monkey keeps his cookies before hiding behind the doorway. He reenters and sees Po performing a perfect split near the ceiling, chowing down on the cookies. Realizing Po's latent talent, Shifu takes him high into the Wu Dan Mountains to the Pool of Sacred Tears where Oogway founded the origins of Kung Fu. With a dramatic flourish, Shifu proclaims to be Po's master, with full faith in his student at last. With that emotional support, Shifu begins his rigorous training Po, using food as a reward. Po's unique training proves to be successful, and he grows stronger and more coordinated while Shifu's own spirits rises and advances at Po's rapid improvement. Shifu's faith in Po is vindicated in an increasingly energetic duel over a dumpling that becomes a wild spar in which the Giant Panda fights with powerful and innovative skill to win. However, it is when Po throws back the dumpling, he won that Shifu has truly advanced, with a newfound emotional strength and serenity.

Tigress leaves the Jade Palace and runs out to the countryside, soon followed by the rest of the Five, to meet Tai Lung head on. They find him crossing the Thread of Hope, a series of bridges through the mountains. They attempt to stop him on the last bridge. After an epic battle, the Five gain the upper hand and appear to have defeated Tai Lung, tying him to the remains of the severed bridge and sending him into the mist below. However, Tai Lung's skills prove superior, and he surprises them by flinging himself onto the cliff and overpowering them with a chi block, leaving only Crane to return as a warning. Crane flies in, carrying the rest of the Five, who have been paralyzed by Tai Lung's attacks.

Shifu decides that Po is ready to receive the Dragon Scroll, but the scroll reveals nothing but a blank, reflective surface. Believing the scroll to be useless, Shifu orders Po and the Five to evacuate the valley. As Tai Lung arrives and fights Shifu, the distraught Po finds his father who, in an attempt to console him, reveals that the long-withheld secret ingredient to his famous "secret ingredient soup" is nothing. He explains that something becomes special if people truly believe that it is. Po opens the scroll to see his reflection on its glazed surface and realizes the secret. Po and goes back to confront Tai Lung before the leopard is able to kill Shifu.

Shifu waits at the top of the steps until Tai Lung arrives. Refusing to give his old student the scroll, Shifu battles Tai Lung. Tai Lung demands his birthright to have the scroll and blames Shifu for planting dreams in his head of what he thought was his destiny and not standing up to Oogway when the turtle disagreed. Tai Lung see Master Oogway's memorial, the snow leopard sneeringly counters that Shifu has obviously replaced the late Master and thus the red panda now has the authority to arbitrarily overrule Oogway's decision. Infuriated at the idea of disrespecting his teacher's legacy like that, Shifu goes on the attack.

In the battle, Tai Lung wails at Shifu to tell him how proud he is, and Shifu admits that he was proud from the first moment, but it was his pride that blinded him from seeing what Tai Lung was becoming. Denying any interest in apologies or any reconciliation with his foster father, Tai Lung demands only the scroll. He is stopped from dealing a deadly blow to Shifu by Po, who appears, exhausted, at the doorway of the temple. Baffled by the Dragon Warrior's pudgy exterior, Tai Lung attacks Po when he reveals the Dragon Scroll in his hand. Their battle takes them into the village, each one vying for possession of the scroll. At one point, Po imagines the scroll as a bowl of dumplings to encourage him to climb a high precipice to get it, but Tai Lung is convinced that the scroll is giving him magical powers.

After a protracted battle, Tai Lung finally wins the scroll and triumphantly opens it for the supposed power within. However, upon seeing the golden reflection within, he completely fails to understand its symbolic meaning. When Po rises to explain it, Tai Lung refuses to accept the panda's words.

Now consumed with such enraged despair, Tai Lung attacks Po again, but without discipline or real purpose behind it. Using ingenuity and his rebounding stomach, Po manages to render Tai Lung helpless. Tai Lung spews out a slur of insults before Po takes his finger in the Wuxi Finger Hold. Tai Lung calls Po's bluff and Po admits that Shifu never taught him the move - he figured it out on his own.

Po flexes his Pinky, resulting in a magnificent wave of raw energy that resonates throughout the valley and is felt by the Five leading the refugees into the hills. Having presumably killed Tai Lung, Po is cheered on by the returning villagers. Tigress and the rest of the Five bow down to Po, calling him master, before Po runs back to the temple to check on Shifu.

Po finds Shifu lying still, but alive, on the floor of the temple and tells him he defeated Tai Lung. Shifu thanks him and tells Po that he's brought him peace before closing his eyes. Po calls out to him and Shifu reprimands him, saying that he's merely resting. Po lies down beside him and, after a quiet, meditative moment, asks if he wants to get something to eat.