The film starts with Toula (Nia Vardalos) and her dad Gus (Michael Constantine) driving her daughter Paris (Elena Kampouris) to school. They stop to pick up Nick's (Louis Mandylor) kids, and then Nikki's (Gia Carides) kids. Gus bugs Paris about finding a Greek boyfriend and to get married soon and have sons. This goes all the way to school when Paris gets out of the car. Toula, trying to comfort her daughter, only embarrasses her in front of everyone.
Toula narrates that she has been trying to stay close to Paris, even going as far as to volunteer at her school, but all it does is embarrass both of them. On top of that, Toula and Ian (John Corbett) haven't had much of a romantic spark to their relationship since getting married.
Paris is at a college fair at school. Toula and Ian want her to pick Northwestern University so she can stay close to home. The whole Portokalos clan shows up for support, including Maria (Lainie Kazan), Angelo (Joey Fatone), Aunt Voula (Andrea Martin), and Mana-Yiayia (Bess Meisler). Paris talks to the rep from Northwestern (Rob Riggle), which prompts the Portokalos men to confront him and ensure that she gets accepted. However, Paris is set on going to school far from Chicago, to Toula's dismay.
Gus has taken it upon himself to prove that he is a direct descendant from Alexander The Great. He gets Toula to teach him how to use a computer so he can trace his ancestry. It proves to be such a struggle that Ian and Nick must help as well. Gus finds his marriage certificate and sees that it was never signed by a minister, meaning he and Maria are technically not legally married. Gus breaks the news to Maria and insists they must set up a wedding immediately. Maria refuses, as she wants Gus to propose properly, which he didn't do 50 years earlier. Gus doesn't see the point in doing so, so Maria turns against him.
Following this, Voula tells Toula that she and Ian need to go on a date to retain the romance in their marriage, but to avoid arguments, they must not talk about Paris. Toula and Ian go out for dinner that night, and they do talk about Paris and how concerned they are that she might pick a school away from Chicago. When they get home, they start to fool around in the car until Maria, Voula, and Nikki catch them. After they leave, they continue.
The family meets a famous TV personality named George (John Stamos) and his wife Anna (Rita Wilson). Knowing George is Greek, Gus invites him and Anna to their restaurant and to bring their son so he can meet Paris. When they arrive at the restaurant, the family is stunned (and disappointed) to see that George and Anna's son is 7 years old.
One evening, Maria calls Toula's home to tell her and Ian that Gus got stuck in the bathtub since his bad hip locked. Toula, Ian, Nick, and Angelo rush over to help, but they're afraid to do so because Gus is nude. They try to turn him over, but they eventually resort to calling an ambulance. As he is being carried away, Gus then proposes to Maria properly, and she accepts (begrudgingly).
The Portokalos women help Maria plan her wedding, but her demands become so hectic that their wedding planner quits on them. Meanwhile, Paris receives acceptance letters from both Northwester and NYU. She tells her parents that she wants to go to Northwestern just to make them happy, even though that's not what she wants. Toula, being tasked to fix everything, assembles the family together so that Maria can have the wedding she really wants. With everybody having a job to do, the time has come to plan another big fat Greek wedding.
At school, Paris witnesses her crush Bennett (Alex Wolff) approaching his own crush to ask her to the prom. Unfortunately, the girl's new boyfriend asks her as well. Paris saves Bennett and asks him herself to go to prom. He accepts.
Prom night arrives, which is the same day as the wedding. Paris tells Toula and Ian that she wants to go to NYU, and while it hurts them to send her away, Toula and Paris share a tender moment before Bennett shows up. On the way to prom, Paris bonds with Bennett after learning that he comes from a Greek family.
Gus receives a surprise visit from his older brother Panos (Mark Margolis). He is there to support his brother, and they have a drink with Ian and Nick. Ian gets his buddy Mike (Ian Gomez) to get his police buddies to get them all to the church on time.
At the church, Maria is walked down the aisle by Nick. Problem is, Gus has gotten pretty drunk and he can't stop giggling. Maria walks away since he won't take this seriously, prompting the women to run and convince her to go on with it. Panos enters and tells Maria that Gus has loved her for the last 50 years since she agreed to go with him to America. Maria knows she loves Gus too, and they proceed with the wedding. As it goes on, Toula and Ian rekindle their spark, while Paris and Bennett share their first kiss at prom.
The family gathers at home for the reception. Paris and Bennett join them, and Bennett is jumped by Paris's cousins. Toula gives Gus a letter from the ancestry site confirming that he is a direct descendant of Alexander The Great. He proudly goes up to announce it. Toula lets Ian know that she really wrote it.
The film concludes with the whole family dropping Paris off at her dorm in NYC.