Nicholas Angel (Simon Pegg) is undoubtedly London's finest constable. His arrest record far surpasses that of any other officer, and he continues to undergo training to better his skills. This makes his fellow constables look bad, so they have him forcibly promoted and transferred to Sandford, a country village with the lowest crime rate in the country.
Sandford is as quiet as it is advertised, which depresses Nick. On his first night in the village, he kicks under-age drinkers out of the local pub, then arresting them for disorderly conduct in the streets. One of his arrestees turns out to be his new partner, Danny Butterman (Nick Frost), a doughy, affable chap whose father, Frank (Jim Broadbent) is the village's chief of police. Nick meets his fellow constables who, with the exception of the smug Andy's (Paddy Considine and Rafe Spall), are affable but neither adept at nor much interested in investigative police work. The only other people who seem interested in law and order are the Neighbourhood Watch Alliance, a group of long-time residents who care deeply about maintaining Sandford's reputation as the nation's best village and are concerned about the arrival of street performers and other riffraff. Danny, however, pesters Nick for details of his career in London, which Danny is certain was filled with the kind of blazing action he has seen in American action films like Point Break and Bad Boys II.
For a few days, Nick's most exciting moments are chasing a runaway swan and then a shoplifter, and confiscating the arsenal a local farmer has collected over the years, including a rusty sea mine. He also pulls over for speeding the local solicitor and his much younger girlfriend. The two of them are on their way to perform in their "homage" to Shakespeare, a dreadful updating of Romeo and Juliet. After the performance, the two would-be Thespians are brutally murdered by a dark-cloaked figure with a hatchet. Their bodies are then strewn about in the road where Nick and Danny had pulled them over for speeding and their car wrecked to make their deaths appear to be a gory traffic accident. The other police officers are content with explanation, despite Nick's concerns about the lack of skid marks at the scene.
The next day Nicholas and Danny are tipped off to a possession of illegal weapons outside of the city. They go to the farmhouse with the entire crew - and Saxon. But it's not the dog they need. It seems Saxon's trainer is the only one who can understand the guy in charge of the farm, who shows Sgt. Angel the impressive collection of weapons that he's managed to stash. Nicholas is floored at this very dangerous and highly illegal collection. He, Danny and the rest of the officers haul in the collection. To celebrate, Danny invites Nicholas out to an evening at the local pub, where he encourages Nicholas to order more than just his usual cranberry juice. He obliges and after several pints of lager, they escort local businessman George Merchant - who's had several beers, back to his estate. They then head back to Danny's pad, where Danny invites Nicholas inside. There, he shows Nicholas how to switch off and unveils his incredibly impressive DVD collection. While they're watching Point Break and Bad Boys II, another "accident" is being setup involving George Merchant and his rather posh estate, which the NWA doesn't find keeping in with the villages' rustic asthetic.
The next day, they're called to the scene of yet another accident - this time it appears that George Merchant is dead and the accident was covered with an application of bacon and beans. But Nicholas knows that George Merchant wasn't killed in an accidental explosion - he once again believes this is murder. The next day at the station he and Danny are putting together the pieces of the accident but so far no one believes Nicholas' theory that George was murdered.
The following Saturday it's time for the town fair. Nicholas is unfortunately strapped with working security. Danny wants to see Nick's sharp shooting skills during a game - he does so and wins a cuddly monkey. While a local lottery is being held for some rather nice prizes, Nicholas is greeted by the reporter Tim Messenger. He sees Leslie Tiller telling him something. Messenger tells Nicholas to meet him behind the church at 3:00. While drawing the next name for the lottery - which happens to be Tim Messenger, the church clock strikes 3:00. Nicholas stops what he's doing and quickly runs behind the church - but once again it's too late. It appears that a large part of the church roof has fallen on Messenger and decapitated him. Frank quickly rules it an accident but Nicholas suspects otherwise.
Nicholas and Danny are left guarding the crime scene while the rest of the department has gone home for the night. The next day Nicholas is furious at the rest of his department - who are still believing that the deaths are accidents. But Frank reassures him otherwise, and while Nicholas is busy putting the pieces together of these horrific crimes, the rest of the department informs him that it's Danny's birthday.
Nick goes to the local flower shop to buy a peace lily for Danny as a birthday present. He is surprised to see the shop's proprietor, renowned for her horticultural skills, leaving town. She tells him that the land she owns was to be bought by the businessman with the assistance of the Thespians. Then, when they were both killed, the reporter informed her that her land was much more valuable than what the businessman offered her, so she has sold her shop to a land developer from the city. She also reveals her connections to Skinner. When Nick briefly goes outside to his car, the dark cloaked figure stabs the woman to death with her garden shears. Nick gives chase but cannot catch up to the villain, who was wounded in the escape. Convinced that Skinner's connection to the property deal and attitude toward those murdered is sufficient evidence against Skinner, Nick takes the police force to confront him. But Skinner has no wound and his store's surveillance tapes establish that he was on the premises all day.
Nick is prepared to give up when it occurs to him that instead of a single murderer, several dark-cloaked murderers might be working together. This theory is confirmed when he is attacked in his hotel room by one of Skinner's employees, who is wearing a dark cloak. Nick defeats him and then impersonates him when Skinner radios to see if Nick has been killed. Nick traces Skinner to a castle outside of the village. There he finds the Neighborhood Watch Alliance, clad in the dark cloaks, chanting ritualistically. The NWA reveals that they have all been behind the murders, with their motive simply being civic pride, and had nothing to do with property deal between those who were murdered. Anything that could strip Sandford of its status as the nation's best village is violently opposed: The solicitor and his girlfriend were murdered because their terrible acting brought ill repute to Sandford's theatre company, the businessman was murdered for owning a tacky home, the journalist for poor spelling, and the horticulturalist for even thinking about moving away. Nick tries to arrest them but Frank and Danny appear in support of the NWA. They chase Nick through the grounds of the castle, where he finds the remains of other people the NWA has killed. The NWA surrounds Nick, and Danny steps forward and stabs him. Danny takes Nick's body away in the boot of his car.
At a safe distance, he lets the quite-alive Nick go -- they had faked Nick's death using ketchup packets for blood and Nick's notebook to avoid actual skin penetration. Danny refuses to believe his father and the NWA are responsible for murder and persuades Nick to take his car and return to London. In London, Nick sees a collection of action film videos and, inspired, returns to Sandford to put an end to the NWA. He takes the arsenal from the police evidence room and confronts many of the NWA members in the town square. They are equally as well armed as he is, and he vanquishes them only through the timely assistance of Danny.
In the local pub (whose owners are also NWA members), Frank and the other constables, in full riot gear, surround Nick and Danny. But Nick is able to persuade the constables that he is in the right. Frustrated, Frank runs away. Nick and the other officers go to the supermarket to apprehend Skinner, but when his employees put up a spirited fight, Skinner is able to escape with Frank. Danny and Nick give pursuit in their police car, and in the process find the runaway swan. Skinner and Frank are forced to abandon their car, and Nick and Danny give chase on foot. Nick and Skinner fight in a scale replica of the village, and Nick wins when Skinner falls and impales his chin on model of the village church, though this doesn't kill him. Frank tries to flee in Nick and Danny's car, but crashes into a tree when the swan attacks him.
Nick's former London superiors arrive in Sandford to congratulate him and ask him to return, as London has become crime ridden in his absence. Nick refuses because he has made such good friends and finally learned to enjoy life in Sandford. However, at the station, the last remaining member of the NWA tries to kill him. Danny takes the full brunt of the gun blast, and in the ensuing chase, the sea mine is detonated, destroying the station house.
But no one is killed. Danny is promoted to Sargent and Nick becomes the Inspector. Danny and Nick continue to patrol the streets of Sandford together with Marcus and Mike from Bad Boys as their role models.