In New York City, Mick “Crocodile” Dundee, former adventurer from the Northern Territory of Australia, lives with his girl friend, reporter Sue Charlton. While Sue is at work, Mick goes to his favorite bar and announces to the patrons that he is looking for a job. His friend, Leroy, tells Mick he may have work for him as a deliveryman. However, Al, the barkeep, warns Mick that Leroy’s business may not be legal. Outside, Leroy confesses he sells office supplies, but keeps it a secret to retain his tough-guy image, like the Jim Croce song, “Bad Bad Leroy Brown.” Elsewhere in Colombia, South America, Sue’s ex-husband, journalist Bob Tanner, takes photographs of drug cartel leader Luis Rico while on assignment for the Drug Enforcement Administration (DEA). At Rico’s cocaine plant, Bob captures Rico on film executing a man. However, Rico’s henchmen see Bob and fire their guns at him. After escaping, Bob mails the film to Sue in a letter before returning to his hotel. Placing a telephone call to Inspector Brannigan at the DEA, Bob requests witness protection in exchange for the photographs. After hanging up, Bob places another call to Sue’s apartment, informing her about his letter. While he leaves a message on her answering machine, Miguel, Rico’s second-in-command, overhears that the film is going to New York. Afterward, he orders Rico’s henchman to murder Bob. In New York, Mick receives Bob’s letter for Sue from the postman. Meanwhile, Miguel kidnaps Sue and takes her to Rico’s Long Island mansion. Rico asks for the film, but Sue has not gotten the letter from her ex-husband. Just then, Rico receives a telephone call from one of his hitmen informing him that the film is not in Sue’s apartment, and Mick is on his way home. Believing Mick has the film, Rico issues an order to bring Mick to the mansion, but learns DEA agents are around the building. When Mick arrives at the apartment, Rico telephones, instructing him to bring the film to the Hoyt Street subway station to be handed over to one of his men. Before hanging up, Rico warns Mick not to be followed. As he walks to the station, Mick notices a DEA agent. Cornering the agent in a restroom, Mick places a knife to his neck and asks why the agent is following him. He tells Mick he was ordered by Inspector Brannigan to obtain the film. Escaping the agent, Mick arrives at the station. One of Rico’s hitmen asks for the film, promising Sue will disembark from the incoming train. However, Sue is not on the train, and the hitman pulls his gun on Mick. A tour group arrives at the station. As the hitman is distracted, Mick knocks him out with help from two of the tourists. Returning to the apartment, Mick finds another hitman, but is able to beat him unconscious. When the hitman awakens, Mick has tied his feet together, and is dangling him from the roof. While Mick threatens to drop him, the hitman tells him Sue is at Rico’s mansion. Brannigan arrives, but Mick escapes by jumping off the roof and swinging onto a lower floor. Mick asks Leroy to help him save Sue, and Leroy suggests they get help from Rat, leader of a street gang. Mick tells the gang to create a distraction, while he breaks into the mansion. Rico’s bodyguards deal with Rat’s gang, and Mick sneaks inside, rescuing Sue. As they leave, the police arrive and arrest Rico. In the morning, Brannigan tells Mick and Sue that Rico escaped and has not been found. Suddenly, shots are fired into the apartment. Worried for Sue’s safety, Mick decides to take her to Australia until Rico is apprehended. Arriving at the Northern Territory’s Walkabout Creek Hotel, Mick is reunited with his friends, Walter Reilly, Donk, and Nugget. Mick drives Sue out to his property. Sue asks how much land he owns, and Mick responds that it is large enough to take a couple of days to walk across. He also mentions his gold mine as they hike to his mountainside shack. Meanwhile, Rico learns Mick and Sue are in Australia, and arrives with Miguel, bodyguards, Garcia and Jose. Miguel’s friend, Frank, and his associates, Denning and Erskine, greet them and assure Rico that Teddy, an Aboriginal tracker, will locate Mick. However, when Teddy learns that Rico is searching for “Crocodile” Dundee, he refuses and leaves. Erskine suggests they kidnap Walter Reilly and force him lead them to Mick and Sue. After abducting Walter, Rico and his crew fire their guns into the air, alerting Mick and Sue. Mick tells them he does not care about Walter, and shoots his rifle at Walter, grazing his temple. Sue is startled by Mick’s action, but he assures her that Rico will not kill Walter if he believes they are not friends. As Rico forces Walter to lead them through the outback, Mick signals for a group of nearby Aboriginals to assist him in saving Walter and capturing Rico. One by one, Mick and his cohorts apprehend Rico’s bodyguards and guides. While Sue guards the captured men, Mick gets word to Walter to take Rico and Miguel to Jaba Point. Walter wades into a river, as Rico and Miguel watch from shore. Suddenly, he disappears under the water. Believing that a crocodile ate their guide, Rico and Miguel continue on to Jaba Point. Mick and Walter resurface. Mick goes to Jaba Point, and Walter finds Sue. Grabbing her rifle, Sue sets out to rescue Mick from Rico. Not wanting her to go alone, Walter shows Sue the way back to Mick. When Rico and Miguel reach Jaba Point, Rico starts a brush fire to smoke Mick out into the open, as Miguel hides with his rifle ready. However, Mick sneaks up behind Rico with his knife. Ordering Rico to switch clothes, Mick, dressed as Rico, leads Rico out to trick Miguel into revealing his location. Sue and Walter arrive, and believing Rico has captured Mick, Walter shoots, hitting Mick. Just then, Miguel appears and shoots Rico, who falls to his death over a cliff. Sue fires and kills Miguel. Afterward, Mick appears, wounded, but alive. As Sue kisses him, Charlie arrives and tells Walter it is a good thing he has bad aim. Mick asks Sue if she is ready to return to New York, but she tells him they are already home.