In the tiny European Duchy of Grand Fenwick, Duchess Gloriana XII, the Duchy’s reigning monarch, meets with Prime Minister Count Rupert Mountjoy and the parliament to discuss their country’s impending bankruptcy. Fenwick’s economy is dependent upon its export of wine to the United States, and now competition from a California winery named “Enwick” threatens to put the country out of business. To avert bankruptcy, Mountjoy proposes declaring war on the United States, reasoning that once the Americans defeat the Duchy, they will feel obligated to pour financial aid into the country. To accomplish this, Mountjoy sends a Declaration of War to Washington, then appoints Tully Bascombe, who serves Fenwick in the dual capacity of forest ranger and field marshal, to lead a brigade of twenty men to invade the United States. Although Tully is hesitant to abandon the tranquility of the forest for the vagaries of war, he recruits twenty of his reluctant countrymen to carry out their patriotic duty and defend the fortunes of Fenwick. Armed with bows and arrows, the troops hail a bus to Marseilles, where they board a dilapidated freighter bound for New York. Dressed in chain mail and metal helmets, Tully and his troops land in New York on the day of an air raid drill and find the city deserted. Puzzled by the empty streets, Tully picks up a newspaper and reads about the drill, which has been called because of the impending development of the Q bomb, a weapon one hundred times more powerful than the H bomb. As Tully decides to proceed to the arsenal and surrender, Dr. Alfred Kokintz, the developer of the bomb, perfects a football-shaped working model at the New York Institute of Physics. While marching to the arsenal, Tully and his men are mistaken for space aliens by two civil defense squadron leaders who then report an “alien invasion” to headquarters. After taking a wrong turn through Central Park, Tully ends up at the Institute of Physics, where he meets Kokintz and his daughter Helen. Recalling the newspaper article about Kokintz building the bomb, Tully decides to take the scientist, his creation and his daughter hostage and use them as a bargaining chip to win the war. Meanwhile, in Washington, D.C., the Secretary of Defense has been apprised of the space invaders and orders Gen. Snippet, the officer in charge of New York City, to investigate. When Snippet, accompanied by several police officers, arrives at the institute, Tully decides to take them prisoner, too. As Tully sails back to Fenwick with his prisoners of war, Mountjoy and Minority Leader Benter, unaware of the surprising turn of events, prepare to welcome the American conquerors. The Secretary of Defense, meanwhile, has belatedly received Fenwick’s Declaration of War and, aware that the bomb is now in enemy possession, immediately declares defeat. Upon docking in Marseilles, Tully purchases bus tickets for the return trip to Fenwick, where he enters the palace proudly to announce that he has won the war and captured the Q bomb. As word of Tully’s victory spreads, mighty countries eagerly offer Fenwick military aid. When Mountjoy, disgruntled by the scuttling of his grand plan, proposes returning the bomb, the duchess insists on billeting the weapon in the dungeon, prompting Mountjoy and Benter to resign in protest. The duchess then appoints Tully the new prime minister. In Washington, meanwhile, the Secretary of Defense decides to fly to Fenwick to broker a peace accord. Mountjoy, determined to return the bomb and lose the war, visits Helen and tells her that he wants to send both her and the bomb back to the United States, then offers to help her escape. As the duchess serenades Kokintz on her harpsichord, and the Secretary arrives to discuss the terms of surrender, Mountjoy and Snippet go to the dungeon to retrieve the bomb. Tully, meanwhile decides to visit Helen, and during a heated argument with her over the fate of the bomb, kisses her and realizes that he has fallen in love. Later, Tully returns to declare his love, and as he pounds on Helen’s bedroom door, Mountjoy pulls her out her window and into the duchess’ antique automobile in which Snippet and the New York police are waiting to escape. Upon discovering that Helen is missing, Tully runs after the car. Meanwhile, foreign diplomats, playing a board game called “Diplomacy,” have lined up outside the palace to vie for the bomb. When the car sputters to a stop on a hill, Snippet, holding the bomb in his lap, orders the others to get out and push. At the top of the hill, the car rolls out of control and crashes into a haystack. Tully catches up just as Snippet climbs out of the hay carrying the bomb. When the bomb begins to emit warning noises, Snippet punts it, and after it is tossed among the police and the diplomats, Tully catches it. Tully then negotiates a peace treaty in which the United States pays Fenwick $1,000,000 and agrees to withdraw Enwick wines from the market. After Tully informs the Secretary that he and Helen are to be married and Kokintz plans to remain in Fenwick to develop a new chewing gun, he warns that he will detonate the bomb unless all “the little nations of the world” are made its guardian. Tully explains that by using the bomb as leverage, the little nations will be able to negotiate worldwide disarmament. After the Secretary grants Fenwick custody of the bomb, Kokintz, accompanied by Helen and Tully, goes to the dungeon to examine it. As Kokintz fondles his creation, he sneezes, dropping the weapon, which falls soundlessly to the ground. Tully, Kokintz and Helen then agree to keep secret the fact that the bomb is “a dud.”