Plot

Red Puckett arrives at her grandmother Abigail's house. Hearing silence, she steps further into the house and asks if everything is okay. A voice answers, and she turns to see "Granny" sitting up in her bed. Red is very suspicious of the figure, given his mouth doesn't move when he talks. Much to the Wolf's irritation, she starts calling out his big facial features, including his pointy ears (which the mask fails to hide), his big eyes, and his undisguised hands. Red comments on the Wolf's bad breath, he finally gives up any attempt at continuing to impersonate Granny and tears off the mask.

Little Red Riding Hood (Anne Hathaway) discovers that the Big Bad Wolf (Patrick Warburton) has disguised himself as Granny (Glenn Close). Red corners him and angrily demands to know what he's done with Granny, and the Wolf says he's taken her down and Red is next. This is when the ax-wielding woodsman (Jim Belushi) bursts through the window, startling everyone.

The police quickly arrive. Chief Ted Grizzly (Xzibit) arrives in a marked squad car. He refuses to comment to the reporters if the suspects inside are tied to a criminal called the "Goodie Bandit". Led by detective Nicky Flippers (David Ogden Stiers), Red, Wolf, Granny, and the Woodsman are all questioned about the events leading up to the incident. Grizzly is irritated by Flippers' arrival, especially since the Goodie Bandit has been shutting down goody shops throughout this part of the forest for months, and with this domestic disturbance as the last call, he wants the case to be closed right here and now.

Red claims to get her name from the red hooded cloak she wears as a fashion accessory. Red explains that she was delivering goodies on behalf of her grandmother, to various creatures around the forest. Red is spotted on the roadside by a friend of hers, a white rabbit named Boingo (Andy Dick), who hitches a short ride in Red's basket. Talking to Boingo she discovers a threat from the mysterious Goodie Bandit, who has been stealing recipes all over the forest, causing many pastry businesses to shut down. Red immediately feels sorry for Boingo but learns that he still operates the nearby cable car, which he says is nothing like making muffins all day.

Noticing the scope of the Bandit's work, Red begins to get worried that the thief might try to target Granny's recipe book. When she gets to a payphone a short way down the road, she calls Granny to get advice. Red insists that Granny take the risk that the Bandit could wipe her out seriously and believes that taking the recipe book to her house for safekeeping. Granny tries to discourage Red from coming over, pointing out that it would be too dangerous for her to travel up the mountain by herself.

Red hears the sound of window being broken and runs over to Granny's store and finds that someone has thrown a rock through the front door. Red picks up the rock, turns it over, and finds the words "YOU'RE NEXT!" written on it with a piece of chalk. Rattled, Red realizes that Granny's recipes are the next target. The recipe book has not been taken, as it's locked up in a vault concealed behind a portrait. Deciding that the vandal will probably come back, Red takes no chances.

Hoping to save her Granny's recipes, she embarks upon a journey to take them to the top of a nearby mountain where her Granny lives. Red fell out of rabbit Boingo's cable car while she was conversing with Boingo. On her way, she encounters the Wolf, who asked her a series of suspicious questions. She refuses to let the Wolf search her basket, but he suddenly emits a fierce roar in her face. Red screams and runs away, fearing for her life.

Evading the Wolf, she met the old singing goat Japeth (Benjy Gaither). She immediately tries asking Japeth for directions, but it quickly becomes apparent to her that he is unable to not sing. Without once losing pitch, he explains that this is because he was cursed 37 years ago by a mountain witch. Red uses an old telephone inside the shack to call Granny. When Red reaches her, Granny is in the middle of doing something that apparently requires a lot of attention. She screams out "Bonsai!", before the line suddenly goes dead. Red immediately fears that Granny is in grave danger. She turns and pleads for Japeth to help her.

Japeth then pulls a lever and he and Red are dropped through a trap door and slide down a chute into a mine cart parked in an underground tunnel. The cart then rolls along a track, pops out of the mountain, and plummets down a very steep drop, then goes over a further series of steep drops and airtime hills. The cart speeds through the tunnel as Japeth finishes yodeling. At the end, Red sees that the track abruptly ends. She hangs on for dear life as the cart hurtles towards the dead-end and screams as they hit a tiny ramp and are kicked into the sky. After landing, Red makes the rest of her journey to Granny's house safely and without incident. She knocks on the door and lets herself in, only she finds the Wolf impersonating Granny in the bedroom.

Red concludes her story that the Wolf was going to eat all of them. Grizzly wants to move ahead to book the Wolf, but Flippers decides that they should hear the Wolf's side of things. What at first seems to be an open-and-shut case becomes confused though, once it is learned that the Wolf is an investigative reporter. He reveals that he was searching for a lead on the identity of the Goodie Bandit and had reason to believe that Granny and Red were the culprits. The Wolf and his hyperactive squirrel assistant Twitchy confronted Red in hope of solving the Goodie Bandit mystery. Wolf notices Red riding her bike down a nearby road. Her carefree behavior makes the Wolf think that she might have answers.

Wolf and Twitchy travel to a local sheep pasture and seek out a paid informant of theirs, a sheep named Woolworth (Chazz Palminteri). After the Wolf pays him, Woolworth gives him Red's name. Through another payment, the Wolf learns Granny Puckett's name and is astonished about the possible connection. Woolworth tells them that Granny lives high up in the mountains and doesn't get many visitors (except of course Red), but the word on the street is that Red takes the cable car up the mountain to get there.

The Wolf and Twitchy are next seen walking in the woods near the cable car, following the cabin as it travels up the mountain. He uses a special radar gun and headset to eavesdrop on any activities going on inside the car. The Wolf only picks parts of the conversation confirming the Wolf's apparent suspicions about Red. This is when Red falls from the cable car. The Wolf is somewhat shocked by the fall, and from a distance, observes Red. Red picks up her basket and finds one of the Wolf's footprints underneath it.

Locating Red, Wolf questions her, hoping to get to the bottom of the mystery. By freak accident, as Twitchy is trying to wind the camera up, it snags the Wolf's tail, causing him to cry out in reaction to the sharp and sudden pain. Red mistakes it as him calling an attack, screams, and runs away. Wolf gives chase but ends up running off a cliff and falling into a river below.

Just by pure chance, Boingo shows up, obviously having overheard their conversation, and asks the Wolf if he is going to Granny's to throw a surprise birthday party for Red. Realizing that Boingo might be suspicious if he tells the truth, the Wolf plays along with the idea and asks him if he knows how to get there. Amazingly, Boingo knows of a shortcut that involves going "over the woods and through the river", only to realize that going through the river will get them wet.

They make haste for Granny's house, arriving ahead of Red via a "shortcut" known to Boingo. Wolf and Twitchy trudge through a dark and flooded cavern, guided by Twitchy's camera light. The Wolf and Twitchy pick up their pace as they are chased by bats lurking in the darkness and find themselves in a cavern with a ladder to an exit up above.

The cart enters a tunnel, and the Wolf finds Twitchy fiddling with something. Twitchy says he has found some candles. It was a stick of dynamite. The two fight for the explosive, and in the process, it lands on the floor, is bounced around, and lights the fuses of every single stick of dynamite stored in the back of the cart. The thrown charges blow up the trestle when they hit the track, destroying it. The Wolf manages to pull the emergency brake and stops the cart safely at the bottom of the hill. As they are catching their breath, we hear the sound of another cart in the tunnel. Seconds later, another speeding mine cart bursts out of the tunnel and flies off the end of the rails and right over their heads, accompanied by the sound of Red screaming in terror.

They found Granny already tied up in the closet. The Wolf disguised himself as Granny, planning to trick Red into revealing the truth about the Goodie Bandit. Conveniently for him, Granny keeps a lot of her own merchandise around the house, including a plastic Granny Puckett face mask and apron. The Wolf uses these to disguise himself as Granny. As there is a knock on the door, Wolf throws Twitchy into the closet and they find Granny already in there. The Wolf himself has no explanation for how Granny got tied up in the closet. As proof, Twitchy then shows Flippers the photographs he took to solidify the Wolf's alibi.

The woodsman, an Austrian man named Kirk, explains his appearance at Granny's house was pure coincidence; he is an aspiring actor trying out for the part of a woodsman in a commercial. His thick Bavarian accent hurts his chances when he starts off his attempt with an "Argh!" before the tagline. Jimmy (Joshua J. Greene), the director, quickly cuts the take right there. He tells Kirk to think about something that makes him feel strong and confident, and Kirk thinks of his dream - to become a world-famous German yodeler. Breaking out in a small fit of yodeling, Kirk throws the ax, which flies over the directors' heads and knocks over some stage lights. Jimmy brushes Kirk aside and tells him that they'll look at his tape and call him back later.

After his schnitzel truck was robbed by the Goodie Bandit (raided his truck, stripped it of all four tires, mounted the axles on cinder blocks, and has made off with all of Kirk's supplies), Boingo tried to cheer him up before he received a callback for the commercial and was told to 'find his inner woodsman'. Kirk is ecstatic - this is the first time he has received a callback, so naturally he somewhat freaks out. Jimmy instructs Kirk to, in preparation for the part, get himself into the shoes of a woodsman, by going out into the wild and felling a tree. He spent the rest of the day getting into character by chopping trees, until at sunset a tree collapsed and pushed him through the window of Granny's home.

The investigation turns to Granny, who is secretly an extreme sports enthusiast. Granny was knitting, and talking on the phone with Red, who was asking if it would be safer to bring Granny's recipe book over. Granny tries to discourage Red, on the grounds that the trip would be too dangerous for her. Then Granny realizes that her TV program was on, and hangs up the phone. As soon as she puts the receiver down, Granny is revealed to be wearing skis, and her knitting needles are actually ski poles.

The reason Granny did not want Red to come over was that she was participating in the Xtreme Dream Snow Sports Competition, a big downhill ski races she's been training for three months to compete in. Granny's team is comprised of herself, a fox named Zorra, a penguin named 2-Tone, and a polar bear named P-Biggie. Granny is also warned by her teammates that the guys of the rival team - an all-human team comprised of four athletes, named Dolph, Lisa, Vincent, and Keith - are very aggressive.

Granny competed in a ski race, with Boingo watching as a fan. At some point during the elimination step of the race, Granny's cell phone rings. It's Red, calling from the telephone in Japeth's shack. Granny is unable to talk to Red and quickly hangs up, needing to focus on the fact that she is without help. Granny had been attacked by the opposing team before winning the race. She learned that the Goodie Bandit hired the team to eliminate her. To stall the ski team, Granny sets off two explosive charges that start a fast-rushing landslide. Granny races down the mountain, in front of one slide path, which quickly allows her to overtake the henchmen. Granny speeds downhill ahead of the first slide path, crossing the finish line and literally winning by a landslide, before using a parachute to hastily escape. While flying home, Granny spots Red's airborne mine cart, and calls out to Red to use her cloak as a parachute before she disappears behind another cloud. While parachuting back home, she got tangled in the parachute strings, which snagged on her ceiling fan and threw her into the closet.

Despondent over her Granny's lack of honesty, Red wanders off alone. Meanwhile, Nicky Flippers realizes that the one commonality between all four stories was a bunny named Boingo (Andy Dick) and concludes that he is the Goodie Bandit. However, Boingo has already sneaked into the home and stolen Granny's recipes.

Red sees Boingo and follows him to his hideout at a cable car station, but the police pursue him in the wrong direction. Granny, the Wolf, and the Woodsman manage to locate Boingo as he is explaining his evil scheme to Red. Boingo plans to add an addictive substance to the stolen recipes, and then explode the forest, making way for new real estate for expanding his business.

The Wolf and the Woodsman go undercover to distract Boingo as Granny sneaks into his lair, but open conflict ensues. Boingo sends a bound and gagged Red down the mountain in a cable car loaded with explosives, and Granny goes after her, with Boingo and his henchmen in pursuit. Red manages to free herself, and escapes with Granny, while the police, who have been located by the Wolf's assistant Twitchy Squirrel (Cory Edwards), are waiting at the bottom of the mountain to arrest Boingo and his henchmen.

The Woodsman finds success as part of a yodeling troupe, and Red, Granny, the Wolf, and the Wolf's assistant are enlisted by Nicky Flippers to join a crime solving organization called Happily Ever After Agency.