Once-wealthy string magnate Rudolf Smuntz (William Hickey) dies, leaving his factory and run-down mansion to his sons, Lars (Lee Evans) and Ernie (Nathan Lane). When Lars refuses a buyout from Zeppco, his money-hungry wife April (Vicki Lewis) throws him out. Meanwhile, Ernie's dream of becoming a famous chef is dashed when the city mayor (Cliff Emmich) is poisoned by a cockroach, and Ernie's restaurant is closed by the Board of Health. The despondent brothers find solace in their father's mansion.
Ernie and Lars discover that the property is a lost masterpiece by famed architect Charles Lyle LaRue, worth a fortune if properly restored. Multi-millionaire LaRue collector Alexander Falko (Maury Chaykin) makes an offer, but Ernie refuses, believing he and Lars can make a larger profit at auction. However, the house has one stubborn occupant: a resourceful and treacherous mouse. Lars is dismissive but Ernie, haunted by the cockroach incident, is determined to eliminate any vermin that could ruin their plan.
Ernie and Lars try an escalating series of tactics to kill the rodent, each failing spectacularly and damaging the house even more. They are served with a repossession warning by the bank from an overdue mortgage payment. The brothers try to raise the money by withholding pay from the factory workers, triggering a strike. A hapless Lars tries to run the machinery by himself but ends up losing his clothes. He is unexpectedly reunited with April, who has learned of the auction and the brothers' prospective fortune.
The brothers purchase a psychotic cat named "Catzilla," whom the mouse leads on a destructive rampage and into the dumbwaiter to the cat's demise. An eccentric exterminator named Caesar (Christopher Walken) is hired, but the mouse attaches him to the winch of his own truck and violently drags him out of the house. Ernie tries to revive the deal with Zeppco behind Lars' back, but his meeting is thwarted when he is hit by a bus while trying to impress two Belgian hair models, Ingrid (Debra Christofferson) and Hilde (Camilla Søeberg). As Ernie is taken to the hospital, Lars informs him that April has given them the money to pay off the mortgage.
Returning to the further damaged house, the brothers resume their crusade with explosive but unsuccessful results. An answerphone message from Zeppco reveals Lars' rejection of their initial offer without telling Ernie, and Ernie's attempt to sell the factory in secret, which has resulted in Zeppco withdrawing their proposal. The ensuing argument culminates in Lars throwing an orange at Ernie which knocks the mouse unconscious. Unable to finish him off, they seal the mouse in a box and mail him to Fidel Castro in Cuba. The brothers reconcile and renovate the house.
The night of the auction, Falko offers $10 million, but Ernie again refuses, and the auction begins. Lars discovers the mouse's box, returned due to insufficient postage and with a hole gnawed out of it. The mouse devours their father's "lucky string," making their vendetta even more personal. The brothers attempt to flush out the mouse by feeding a garden hose into the wall. As the auction reaches a record $25 million bid, the house suddenly floods, washing everyone outside as the mansion collapses. The attendees leave, as does April with a wealthy buyer. The brothers' sole consolation is knowing the mouse must finally be dead, as their father's "lucky string" is found in the wreckage, which they accidentally pull in half.
With nowhere else to go, the brothers return to the factory and fall asleep with a single chunk of cheese to eat. Having survived and followed them on the underside of the car, the mouse starts the machinery and inserts the cheese, inventing the world's first string cheese. Inspired, Ernie and Lars surrender to the mouse and rebuild the factory as a novelty string cheese company. Lars begins a relationship with Hilde, and Ernie puts his culinary skill to work developing new cheese flavors, with the mouse as his personal taste-tester.
The film ends with the "lucky string" on display beside Rudolf's portrait, with an inscription of his motto: "A world without string is chaos."
