The cynical Captain Harris and his dim-witted lacky Lt. Proctor finally finds the goods he needs to push Commandant Eric Lassard out at the Police Academy: he is one year late for mandatory retirement. But before he retires, Lassard is chosen as "Police Officer of the Decade", and brings his favorite graduates Sgts. Hightower, Jones, Tackleberry and Hooks, Lt. Callahan, and new graduate Officer Thomas "House" Conklin to the National Police Chiefs Convention in Miami Beach to celebrate with him.
Harris and Proctor decide to travel down to Miami Beach to discredit Lassard once again so Harris can attempt again to take over the police academy for himself. But Harris and Proctor are tricked into chartering an old rickety cargo flight down to Florida while the police academy group travels first class aboard a 747 plane.
While there, the misfit police officers meet Lassard's nephew, Sgt. Nick Lassard of the Miami Police Department. The fun is complicated when he unwittingly takes a bag belonging to jewel thieves containing stolen merchandise.
As the jewel thieves try to get the bag back, and Captain Harris tries to prove to Commissioner Hurst that he's the right man to replace Commandant Lassard, the usual hijinks ensue, including Lassard trying to guess the annual procedural demonstration.
At the awards ceremony, when the jewel thieves kidnap Commandant Lassard, he goes willingly, thinking it is indeed the procedural demonstration. It launches a negotiation, which Captain Harris botches, getting himself captured as well. A chase across the Everglades ensues to rescue the oblivious and absent-minded Commandant. During the chase, Harris falls overboard and is nearly eaten by a large aligator, until Hightower dives into the water to rescue him and subdue the aligator. When the chase leads to the end, Lassard is held at gunpoint by the jewel thief's leader, still thinking that it's a demonstration. When Nick tells his uncle that this isn't a demonstration, the elderly Commandant knocks out the jewel thief by himself and captures him.
The next day, when Commandant Lassard is giving his "Police Officer of the Decade" award and announces his retirement from the force, a loophole by Nick shows that his mandatory retirement is in fact optional and that he can retire anytime he wants to. Lassard then changes his mind about retiring much to great joy and applause.