.In 1967, British spy Austin Powers thwarts an assassination attempt by his nemesis Dr. Evil in a London nightclub. Dr. Evil escapes in a space rocket disguised as a Big Boy statue, and cryogenically freezes himself. Austin volunteers to be placed into cryostasis in case Dr. Evil returns in the future.
Thirty years later, in 1997, Dr. Evil returns to discover his henchman Number 2 has developed Virtucon, the legitimate front of Evil's empire, into a multibillion-dollar enterprise. Uninterested by genuine business, Dr. Evil conspires to steal nuclear weapons and hold the world hostage for $100 billion. Evil also learns that, during his absence, his associates have artificially created his son, Scott Evil, using his frozen semen. Now a Generation X teenager, Scott is resentful of his father’s absence and resists Dr. Evil's attempts to get closer to him.
Having learned of Dr. Evil's return, the British Ministry of Defence unfreezes Austin, acclimatizing him to the 1990s with the help of agent Vanessa Kensington, the daughter of his sidekick in the 1960s, Mrs. Kensington. Posing as a married couple, Austin and Vanessa track Number 2 to Las Vegas and meet his Italian secretary, Alotta Fagina. Later, Austin infiltrates Fagina's penthouse suite for reconnaissance and discovers plans for Dr. Evil's "Project Vulcan", which involves drilling a nuclear warhead into the Earth's molten core and triggering volcanic eruptions worldwide. Fagina discovers Austin in her suite and seduces him into revealing his true identity. Learning that Austin is back, Dr. Evil and his entourage conspire to defeat the spy by creating a series of fembots: beautiful female androids equipped with automatic guns concealed in their breasts.
Austin and Vanessa attempt to infiltrate the Virtucon headquarters but are soon apprehended by Dr. Evil's henchman, Random Task. Meanwhile, the United Nations accede to the demands of Dr. Evil, who proceeds with Project Vulcan regardless. Austin and Vanessa are placed in a death trap by Dr. Evil, but they easily escape, and Kensington is sent for help. While searching for Dr. Evil, Powers is confronted by the fembots, whom he defeats by counter-seducing them with a striptease. Led by Vanessa, British forces raid the underground lair, while Powers finds the doomsday device and deactivates it. Powers confronts Dr. Evil, but Fagina arrives holding Kensington hostage. They are interrupted by Number 2, who attempts to betray Dr. Evil by making a deal with Powers. Dr. Evil uses a trap door to eliminate Number 2, then activates the base’s self-destruct mechanism and escapes. Powers and Kensington flee just as a nuclear explosion destroys the lair.
Powers and Kensington are later married, and during their honeymoon Powers is attacked by Random Task. Powers subdues the assassin using a penis pump, allowing Kensington to knock him out using a bottle of champagne. Afterwards, the newlyweds adjourn to the balcony. Among the stars, Powers spots the cryogenic chamber of Dr. Evil, who vows revenge on Austin.
- Mike Myers as Austin Powers and Dr. Evil
- Elizabeth Hurley as Vanessa Kensington
- Michael York as Basil Exposition
- Robert Wagner as Number Two
- Seth Green as Scott Evil
- Mimi Rogers as Mrs. Kensington, Vanessa's mother and a secret agent from the 1960s
- Fabiana Udenio as Alotta Fagina
- Mindy Sterling as Frau Farbissina
- SGC Belfry Ted Nude-Gent as hairless Mr. Bigglesworth
- Paul Dillon as Patty O'Brien, an Irish assassin
- Charles Napier as Commander Gilmour
- Joe Son as Random Task
- Will Ferrell as Mustafa
- Carrie Fisher as the group therapist
- Clint Howard as Radar Operator Johnson Ritter
- Michael McDonald as henchman flattened by steamroller
- Rob Lowe as an unnamed friend of Dr. Evil's deceased henchman
- Christian Slater as the easily fooled security guard
- Neil Mullarkey as the quartermaster clerk
- Burt Bacharach as himself
- Dennis Hopper as himself