The movie opens with a Star Wars-esque text on the screen that informs the viewer of the war between Planet Druidia and Planet Spaceball. Druidia has been at peace for some time now and has managed to stop Planet Spaceball in their tracks by constructing a giant air shield around the planet. Planet Spaceball has been in an air shortage ever since and the numbers are reaching critical levels.
We are shown the outline of an extremely large ship. The end of the ship has a bumper sticker on it that reads "We brake for nobody!". Inside we are shown that one of the cadets has contacted Lord Dark Helmet when they've reached Planet Druidia. He then goes over Dark Helmet's Helmet when he informs them that he contacted President Skroob. Lord Helmet is furious, but informs his henchman Col. Sanders their plan once they reach Druidia's atmosphere.
Cut to Planet Druidia. We are shown that Princess Vespa, the daughter of Druish king Roland, is about to get married to a guy named Prince Valium, who has a sleeping disorder. As she approaches the alter, she tells her father that she doesn't love the guy she is about to marry and leaves the wedding. She and her caretaker, a robot named Dot Matrix, escape in the new Mercedes space cruiser that Roland had purchased.
We are then shown the outside of a Winnebago. Inside, the captain - Lonestar, is seen asleep at the wheel while his companion Barf is seen stuffing his face. They then get a call from an associate of ruthless mobster Pizza The Hutt. Pizza tells Lonestar the job he was originally hired to do got screwed up, and now he's owed $1 million spacebucks. And the money has to be paid by a certain time, or else. The next call they get is from King Roland who wants Lonestar and Barf to track down Princess Vespa, but unfortunately he thinks the Spaceballs might have got to her first. They manage to locate the position of her Mercedes space cruiser and rescue her.
Lonestar decides to make quick tracks to escape Spaceball One and Dark Helmet. He puts the Winnebago into hyper active mode and makes quick tracks. Dark Helmet decides to go after them, but to catch up, they put Spaceball One into Ludicrous Speed mode. They overshoot the Winnebago by a week and a half. Just as they're all set to go home, the Winnebago runs out of gas and they crash into a remote desert planet. Lonestar and Vespa get into a huge fight about what they can take with them, Lonestar tells Vespa to take only what you need to survive. Barf informs them that they have to make haste before Spaceball One comes back to make them all dead.
They get lost in the desert and think everything is hopeless. During the night Lonestar and Vespa share a mutual attraction to each other before they're interrupted by Dot's virgin alarm. The next day after walking for hours, it looks like they're goners. But thankfully they're rescued by a group of small people who are followers of the almighty Yogurt.
Back on Spaceball One, Dark Helmet is desperate to locate Vespa as President Skroob informs them they can use her for ransom to get a crack at Druidia's air. So in order to locate exactly where they are, Col. Sanders informs them about a new technology they can use called Instant Video - where they can watch the movie as it's being made. Unfortunately they fast forward too far and are at the "now" moment of the movie. They then manage to locate the group on the moon of Vega.
Spaceball One heads to Vega to locate them in the desert. Dark Helmet instructs his minions to literally comb the desert for the foursome. But they're taken to Yogurt's underground lair where he teaches the group about the wonderful world of movie tie-in merchandising. He also teaches Lonestar the power of a magical force in the universe called "The Schwartz". Lonestar asks Yogurt about the medallion he wears on his neck. Yogurt tells him that will be later revealed to him at the proper time.
Spaceball One finally arrives in Vega. Dark Helmet decides to trick Vespa into thinking that he's in fact her father King Roland. The trick worked and Lonestar, Dot Matrix, and Barf decide to go after her and destroy Spaceball One in the process. Lonestar is given the Ring Of The Schwartz, as well as a fortune cookie which Yogurt explicitly instructs him to open before eating. He also hands them a can of special liquid schwartz fuel to use if needed.
Back on Planet Spaceball, Dark Helmet has arrived and has presented President Skroob with Princess Vespa, who they will use to scheme King Roland into giving them the combination to Planet Druidia's air shield, destroying Planet Druidia and saving Planet Spaceball. After threatening to give Princess Vespa back her old nose, King Roland agrees to give up the combination. It's 1 - 2 - 3 - 4 - 5. The exact same combination that President Skroob has on his luggage. Skroob orders Spaceball One ready for departure and to have the combination on his luggage changed.
Barf, Lonestar and Dot Matrix finally manage to head to Planet Spaceball, and locate Princess Vespa in a remote prison cell. But to do so requires getting past several heavily armed Spaceballs. They manage to successfully do so. They then high tail it out of the prison and head for Spaceball One.
Spaceball One has managed to successfully penetrate Planet Druidia's air shield. But in order to get the air out, Dark Helmet flips a switch and has Spaceball One transformed into a maid with a giant vacuum cleaner. Lonestar, Barf, Vespa, and Dot Matrix marvel at the transformation. Just as it looks like Spaceball One is successful, Lonestar uses his Schwartz training to turn the vacuum cleaner's switch into the off position. They then fly into the ear of the Mega Maid.
Lonestar finally has his face to face confrontation with Dark Helmet. After a Schwartz measuring contest Dark Helmet reveals that there's two sides to every Schwartz. Lonestar, without his ring, manages to defeat Dark Helmet and push Spaceball One's self destruct button. The Spaceballs and everyone and everything inside the ship flee, that is except for Dark Helmet, Col. Sanders, and President Skroob. The ship self destructs and Mega Maid's head crash lands on an ape planet. The apes are horrified to discover that their planet is being taken over by Spaceballs. Back on the Winnebago, Lonestar and Barf learn that Pizza The Hutt has kicked the bucket and they don't owe him anything anymore.
Victorious, Lonestar heads for Druidia and drops Vespa off at the castle. They resume where they left off with the Princess marrying, or attempting to marry Prince Valium. As they walk down the aisle, Vespa is stunned to learn that Lonestar didn't take the money he was offered - only enough for gas and food. Lonestar and Barf are seen at a random space gas station filling up and stopping in the coffee shop. They're horrified by the contents of "today's special" and quickly get the check and make a b-line for the door. Barf is still hungry so they take a crack at the fortune cookie that Yogurt had given them. Yogurt reveals exactly what the medallion that Lonestar wears on his neck is. It's a royal birth certificate. It certifies that Lonestar is the son of a king and queen, and if they hurry, Lonestar could have a princess in their future. They quickly turn around and head back for Druidia. Just as it looks like the wedding is unavoidable, when the preacher gets to the "speak now or forever hold your peace" part, Lonestar shows up and tells Vespa that he's a certified prince and asks her to marry him. She thinks about it, and then quickly shoves Prince Valium off to the side. They get married and sail off into deep space in the Winnebago.