In the beginning we see Derice Bannock (Leon) running across the island of Jamaica. Derice is training for the 1988 Olympic Games, and hopes to be a gold-medal winner just like his father.
Before the trial run, Derice visits his friend Sanka Coffee (Doug E. Doug), who is competing in a pushcart race. Sanka wins the race but ends up crashing just after he crosses the finish line, to everyone's amusement.
Later that day, Sanka joins Derice's family at the track for the Olympic trials. Derice is preparing to race, meeting a few other competitors, including a short athlete named Junior Bevil (Rawle D. Lewis). The race starts off great, but halfway across the track, Junior stumbles and trips several runners, including Derice. Derice stumbles back to his feet as the finish-line tape is broken, watching his dreams go up in smoke.
Derice confronts Coolidge (Winston Stona), who is charge of the Jamaican competition, and begs for a chance to run again, but Coolidge refuses. Derice then notices a photo of his father on his wall, next to an unfamiliar man. Coolidge identifies the man as Irving Blitzer, an American now living on the island and who had tried to convince Derice's father, Ben, to compete in bobsledding. Derice, seeing another chance to compete, as a bobsledder, takes the picture and goes to meet with Irv.
Sanka hears about Derice's idea. At first he is excited but balks upon learning that bobsledding is a WINTER sport. Eventually Sanka is persuaded to help his best friend. The two men find Blitzer (John Candy) working as a bookie in a run-down pool hall. Having been disqualified from bobsledding due to cheating, and therefore disgraced, Blitzer is far from eager to help them, and does not want anything to do with the sport of bobsledding. However, the two athletes don't give up. Upon learning that Derice is the son of his old friend and colleague, Blitzer relents.
Next day, Blitzer tries to recruit additional team members. The first newcomer is a bald man Sanka recognizes from the Olympic running trials, who introduces himself as Yul Brenner (Malik Yoba), and is more than willing to compete in bobsledding so long as it leads him to the Olympics. Only one other man shows up to join the team: Junior, the clumsy runner from the track. having been one of the other runners tripped up by Junior's fall, Yul is immediately hostile to Junior, but relents since without Junior, they don't have a full team.
Blitzer begins training the four immediately. He builds a makeshift bobsled and has them push it down a steep slope, telling the team that if they can't get a push-start completed in under 6 seconds, they won't have a chance at competing. Yul is the second mlddle man, Junior is first middle man. Blitzer chooses Sanka as brakes, but Sanka resists. He reminds him that the driver in bobsledding has many more responsiblities than a push car racer, and can't go out to have fun with his teammates. Sanka relents and decides Derice can be driver.
After the first day of training, Junior returns home with the intention of telling his father about the team. But Mr. Bevil (Charles Hyatt) comes home and tells Junior that he has gotten his son a job with a brokerage house in Miami, which he is expected to take by the end of the month. Intimidated, Junior clams up and cannot say anything more.
Initially, the training does not go well. The group stumbles and falls several times, not even able to get into the sled. But after several tries, they climb in together and rocket down the mountain, eventually crashing into a police car. Blitzer runs after them cheering: they got started in 5.9 seconds! He tells them to bring the sled back up the mountain, making them groan.
Now that the team is in good shape, Blitzer goes to Coolidge to ask for funding to get to the Olympics. But Coolidge refuses, believing that the team will be humiliated. Unshaken, Derice decides they will try to get the money elsewhere. After several fund-raising endeavors, they are far short of their goal. Junior comes back to the team after a day away, announcing that he has sold his car to get the required funds. Derice does not want to take the money from Junior at first, thinking it to be exploiting Junior. But Junior explains that he still feels guilty for costing Derice and the others their first Olympic chance, and gladly gives up the money.
The team heads to Calgary for the Olympic Games. While Blitzer adjusts to the weather easily, the Jamaicans are unprepared for the severe cold and buy heavy-duty coats as soon as the plane lands.
Blitzer registers the team for competition, and meets a few colleagues from his days in bobsledding. He has lunch with one friend, Roger (Paul Coeur) and asks him for a sled so his team can compete. Roger is reluctant but agrees to sell off an old backup sled from the US team.
The team begins learning how to move and walk on ice, using a hockey rink for practice. It does not go well at first, but they eventually make progress. That night, Derice watches the Swiss bobsled team practicing and becomes enamored with their efficient performance.
Blitzer shows off the sled he purchased to the team. It's is rusted and old, but still works fine.
On their first day at the track, the Jamaican team is met with ridicule and scorn by other competitors. Blitzer tells them that a push-start will not be necessary for the initial run; they will just be nudged down the slide instead. While the run starts off fine, the sled ends up crashing before the finish line. Their next run does not go well either: They end up chasing the sled down the track. A photographer snaps a picture of the group running after the sled, and it makes the papers, which doesn't sit in well with Mr. Bevil and Coolidge.
Derice is repairing the sled when he meets one of Irv's old colleagues, who tells Derice that during the1972 competition, Irv hid weights at the bottom of his sled to accelerate its speed. As a result, he was kicked out and had his gold medals revoked.
The following night at the hotel, Sanka tries to pose as a maid, but Yul brushes him aside, thinking he's insane. Junior receives a telegram from his father. The news story about the Jamaican team alerted Mr. Bevil to Junior's activities, and he is now ordering his son home.
While they are out in a bar that night, Yul encourages Junior to stand up for himself. Junior immediately responds by confronting the German team members who had insulted them earlier, resulting in a huge bar-fight between Yul, Sanka, Junior, and the Germans.
At the Relax Inn Motel, Derice berates his teammates for what happened and tells them the Swiss team would never resort to stunts like that because they're awlays focused on their performance. Yul, Sanka, and Junior don't take Derice seriously and continue snickering. Sanka makes a crude joke about the Swiss team and what happens if they try to push a pretty girl off the ice. A few minutes later, Irv comes in and berates the three for not taking things seriously. He reminds them that everyone hates them and they need to get their act together.
After thinking things over, the Jamaicans resume serious training. With Irv's help, they are quickly whipped back into shape.
Finally, the night of the Jamaican team's qualifying run has arrived. Irv presents the team with special competition suits as a reward for their improved behavior. Irv then meets with the three judges, who remind him that the team must make it off the slope and across the finish line in under 1 minute in order to be eligible. The team sets out, and despite a few bumps, they cross the finish line safely. After several tense moments, their time is revealed: 59.46! Irv and the team are overjoyed.
The guys celebrate by painting their sled with Jamaica's colors, and Derice decides to christen the sled "Cool Runnings." At that moment, Irv gets a letter from the judges informing him that the Jamaican team has been disqualified.
Irv angirlly storms into the offices of the men in charge, demanding to know why. Apparently, there is a rule stating that a team must compete in an international race to qualify. Previously, an Olympic trial would be considered an international race, but this time the committee decided to change the rules. However, Irv isn't fooled and immediately discerns the truth: His former coach (from the '72 Games and currently a primary judge of the '88 Games) Kurt Hemphill, is still punishing him for embarrassing the USA by cheating. Irv confronts Hemphill and confesses that 16 years previously, he'd made the mistake of his life: He resorted to cheating because he wanted to win and didn't care what the consequences were. Instead, he ended up disgracing the Americans by embarrassing everyone -- his coach, teammates, friends, and family -- and his gold medals were revoked as a result. Irv also reminds Kurt that it was HIS mistake, and if Kurt wants revenge, he should punish him, not the Jamacian bobsledding team, as they deserve to represent their country by competing in the Winter Games as contenders and don't deserve to suffer because of his past mistakes. That night at their hotel, the team gets a phone call informing them that the committee has reversed its decision - the Jamaicans are back in!
Everyone on the island of Jamaica watches the bobsled team wave their flag as they enter the Olympic stadium. After the opening ceremony, Irv tries to find some inspirational words for the team. But this conversation is cut short by the arrival of Mr. Bevil, who has come to collect his son. Bevil tells Junior that he is only looking out for his sons' best interest, and demands the young man gather his things. But Junior draws on Yul's advice and stands up to his father, telling him he's staying with his team, and that his father cares about his own interest in making himself look good more than his son's. Junior tells him he's an Olymic athlete now, not his puppet, and sends his father on his way.
On the first day of competition, the Jamaican team is scheduled to compete last. Derice tries to psyche up his team, imitating the behavior of the Swiss. The team begins its run, essentially stumbling down the track and bouncing off the edges. Their end run time is 58.04, landing them in last place.
Derice again tries to imitate the Swiss, but the team is fed up with his antics. Sanka sets him straight by pointing out that they cannot copy the movements of another team; they must get their own style. Derice insists that he just wants to be the best they can be. Sanka counters that "the best [they] can be is Jamaican," and that they didn't come all this way to forget about their heritage. Derice relents after realizing that his friend and their teammates are right.
On the second day of competition, the Jamaican team is psyched for sledding. They pull together a push-start within a fraction of their previous time, and wind up getting off even faster than the Swiss team. Their finishing time is 56.53, rocketing them into 8th place! They are now considered contenders for the medal.
That night while studying the track, Derice asks Irv about why he cheated. Irv explains that he'd become so focused on winning that he couldn't picture life without it, a horrible thing for an athlete to do. Irv tells Derice that he doesn't want him making the same mistakes that he's made 16 years earlier, and tells him to focus on tomorrow.
The last day of competition arrives, and the fans are eager to see Jamaica's performance. They start off with an even better formation than yesterday, but the ancient sled is unknowingly in poor shape. A bad bounce sends it careening out of control, eventually turning over and sending the team on a terrible out-of-control trajectory.
When the sled finally skids to a stop, several tense seconds pass before the team even moves. Finally, Derice regains consciousness and sees the finish line mere feet away. Paramedics rush down to tend to the Jamaicans, only to part as they rise to their feet. The guys hoist the sled over their shoulders and begin walking toward the finish line, determined to finish the race no matter what.
The crowd, awestruck by the Jamaicans' performance, cheers them on as they finish. Everyone, even Mr. Bevil (now wearing a Jamaican souvenir shirt) shows their admiration: Even though their chances of winning are gone, Jamaica finishes with dignity and pride.
Text at the end reveals that Derice, Sanka, Junior, and Yul returned to Jamaica as heroes - then four years later returned to the Olympics as equals.