| Director | Jim Henson |
|---|---|
| Budget | $14 million |
| Box office | $31.2 million |
Kermit the Frog and Fozzie Bear are newly hired investigative reporters at The Daily Chronicle, and Gonzo the Great is their photographer. After failing to cover a jewel theft from prominent fashion designer Lady Holiday, the three are fired. Kermit convinces their boss to let them travel to London to interview Lady Holiday, but they get no funds for the trip. As a result, they travel in the airplane's cargo hold. As the plane passes over London, they are thrown out in crates without parachutes, and they stay at the rundown Happiness Hotel, which a local refers to as “a place to park your carcasses,” where they meet the other Muppets.
Meanwhile, three of Lady Holiday's models, Carla, Darla and Marla, conspire with Lady Holiday's “irresponsible parasite” of a brother, Nicky, to steal a valuable necklace while Nicky and Lady Holiday are at dinner. Miss Piggy, an aspiring fashion model, surprises Lady Holiday at her office and is hired as a receptionist. Kermit arrives at the office and mistakes Piggy for Lady Holiday. Both are immediately taken with each other, so when Kermit asks to interview her about the robbery over dinner, Piggy agrees and does not tell him her true identity.
That night Kermit and Piggy, along with Fozzie and Gonzo who insisted on joining, have dinner at the expensive Dubonnet Club, arriving just before Lady Holiday and Nicky. While dancing, Kermit becomes even more infatuated with Piggy and Nicky falls for her after Lady Holiday recognizes her. When Nicky and the models succeed at stealing the necklace, Piggy's lie is exposed. Later that night, Gonzo develops the film he shot at the club and finds a photo of Nicky and the models stealing the necklace, but when the door to their makeshift darkroom is thrown open, the negative is spoiled.
The next day, Kermit and Piggy argue in a park about her deception, but eventually reconcile. At Lady Holiday's fashion show, one of the models fakes an injury and Nicky tells Piggy to go on in her place, giving the thieves the opportunity to frame Piggy for stealing the necklace. Piggy is arrested and Kermit vows to prove her innocence. Gonzo overhears Nicky and the models plotting to steal Lady Holiday's most valuable jewel, the Fabulous Baseball Diamond, and tells the rest of the Muppets who all agree to help free Piggy after Fozzie gives an inspiring speech about justice and truth. Kermit visits Piggy in jail, posing as her lawyer, and tells her of their plan. She tells him she loves him and they kiss.
The night of the robbery, Piggy breaks out of prison and steals a cement mixer to get to The Mallory Gallery, where the Diamond is displayed, but it runs out of gas. Just then, a motorcycle falls out of a passing van, which Piggy breaks the fourth wall to call “an unbelievable coincidence.” The rest of the Muppets get into the Gallery just in time to catch Nicky and the models. The Muppets play keep away with the Diamond, but Nicky eventually secures it and holds Kermit at gunpoint. Just then, Piggy bursts through a stained glass window on the motorcycle and subdues the thieves until the police arrive. As the police lead Nicky away, she tells him she wants to be with Kermit.
The Chronicle, with their story about the robberies on its front page, pays for Kermit, Fozzie, Gonzo and the rest of the Muppets to fly home. As before, they travel in the plane's cargo hold and are thrown out as it passes over the United States, but this time, they all parachute to safety.