Four internationally wanted criminals, named Peter Beaupre (Aleksander Krupa), Alice Ribbons (Rya Kihlstedt), Burton Jernigan (Lenny Von Dohlen) and Earl Unger (David Thornton) have stolen a valuable missile cloaking computer chip for a North Korean terrorist group. They put it inside a toy remote control car to sneak it past security. At San Francisco International Airport, however, Mrs. Hess (Marian Seldes) accidentally takes the bag with the remote control car in it. The thieves then come to Chicago and systematically search every house in Mrs. Hess's suburb to find the chip.
Eight-year-old Alex Pruit (Alex D. Linz) is then given the remote control car by Mrs. Hess for shoveling snow. He soon becomes ill with the chicken pox, and must stay home. While he is at home, he sees the thieves through his telescope and calls the police. The thieves leave by the time the police come. After Alex reports the thieves again, they still manage to get away, and the police still do not believe him. Alex then decides to take matters into his own hands. He mounts a camera on his remote control car and tries to film some footage of the thieves, who are now searching in a neighbor's house. He successfully films Beaupre, but the remote control car is discovered before it can get away and Alice takes the tape. Wondering what the thieves want with a remote control car, Alex opens it and discovers the stolen chip. Right away, he calls the suburb's Air Force Recruitment Center and informs them about the chip.
The thieves realize that Alex has the chip and go after him. They block off the road to the house, and Alice duct tapes Mrs. Hess to a porch chair in her garage and leaves the door open. By this point, Alex has armed the house with more violent booby traps. After several break-in attempts, they chase Alex. He runs to the attic and goes into the dumbwaiter down to the basement. He then runs outside and calls to Alice, Jernigan and Unger. They see him and notice a trampoline below them. Unger and Jernigan jump, but the trampoline gives way and they fall into a frozen pool. Alice then wriggles her way into the dumbwaiter chute, but falls down to the basement. Alex rescues Mrs. Hess. He is then cornered by Beaupre, but scares him off with a fake gun.
Meanwhile the FBI, which has also been tracking the chip, goes to Alex's school, after being tipped off by the Air Force. Alex's family brings the agents to their house, where the police arrest Jernigan, Unger and Ribbons. Beaupre, however, managed to escape and hides in the snow fort in the backyard. Alex's brother Stan's pet parrot drives the remote control car into the snow fort and threatens to light fireworks which are lined around the inside. Beaupre offers a cracker, but the parrot demands two. Since he only has one, the parrot then lights the fireworks, and escapes. Beaupre's cover is literally blown, and the police arrest him.
Alex and his family celebrate with their dad returning. Mrs. Hess, who befriends Alex after he rescues her, is there along with the FBI and police while the house is repaired. Alex gets a surprise: another remote control car. In the final scene, where the four thieves are having their mugshot photos taken, they are shown to have Alex's chicken pox.