In Eastern Europe, General Boris Dragić, the brutal dictator of the Slovenian-occupied martial law country of Kolumen, hears about Team Arch and their adventures. Having learned of their humanitarianism, and fearing that it might topple his regime, he sends his military to eliminate them, by hijacking a barge headed for San Francisco Harbor.
At San Francisco, as New Year's Eve approaches, most of Team Arch is patrolling the world, while SpongeBob, Tai, Sakura, and their groups are patrolling San Francisco. Hearing explosions at the harbor, they immediately head over to see Kolumeni Military attacking. With the help of the California State Guard, Team Arch manages to send them running, but Tai and Sakura are injured in the battle, and Team Arch's Japantown lair is destroyed. Afterwards, SpongeBob reluctantly decides to lead Tai and Sakura's groups, while they heal in Sandy's healing pods. His leadership proves to be difficult as he has no experience in leading the Digital Heroes and the Star Alliance.
Meanwhile, as the Kolumeni Military retreats, Dragić orders his men to fire Commander Goran Novak, his deceptive second-in-command, and they do so by tossing overboard. Drifting in the ocean, Novak is found by Ground-Pounder, a sentient, land-destroying sea monster that was once defeated long ago, rendering it immobile, and forced to let the water currents carry it around the world. Ground-Pounder offers Novak new powers in exchange for destroying the Staff of Poseidon, the very weapon that can destroy Ground-Pounder, which is now in Team Arch's possession. Novak reluctantly agrees, but gets more used to it when he is given his new powers. Back in Kolumen, Dragić attempts another plan of attack, but Novak disrupts him, and gets revenge by disintegrating Dragić. Now taking command of the Kolumeni Military, Novak leads his forces to seek out the Staff.
Back in San Francisco, Team Arch were about to finish cleaning up their now-destroyed lair, when the Kolumeni Military attacks them again. They manage to escape in separate shuttles, which are shot down by the Kolumeni Military and crash in different countries. The Kolumeni initially believe they succeeded, but Ground-Pounder alerts them that Team Arch survived, prompting them to continue.
SpongeBob and the Star Alliance crash land Quafia, an equally brutal Western European martial law country ruled by tyrants who hold kangaroo courts. When the Quafian Military arrests them, SpongeBob initially thinks their kangaroo courts are just courts that have kangaroos, until he witnesses a kangaroo trial wrapping up. They encounter another prisoner who was arrested in his home in New York for peacefully protesting against Quafia's current leaders and their tyranny. He also tells them about Ground-Pounder, and the possible rumor of it resurfacing to destroy America. After witnessing the prisoner getting executed, his death motivates the gang to fight back. Despite their best efforts, they are severely worn out, until they are rescued by the Hi-Seas. After escaping, they find a shuttle to flee the country.
Meanwhile, Mr. Krabs, the Digital Heroes, the Staff, and the healing pods land on Jukailo, a country resembling a wasteland of near extinction. The Kolumeni continue their pursuit, resulting in a chase that ends with Mr. Krabs protecting the Digital Heroes and the healing pods by shielding them from a missile blast from the Kolumeni, knocking him into a coma. As Novak leaves with the discarded Staff and the healing pods, he decides to betray Ground-Pounder, who's slowly drifting towards San Francisco, and use the staff to annihilate Team Arch and take over Earth. As Digital Heroes recover, a group of Jukailan's think they're part of Kolumeni Military, leading to another chase that ends with SpongeBob, the Hi-Seas, and the Star Alliance arriving to break up the fight. After befriending the Jukailans, and explaining Ground-Pounder, the two factions heal Mr. Krabs, who tells SpongeBob about Tai and Sakura being captured, and the Staff being stolen. The factions decide to work together to stop Ground-Pounder from destroying America.
Meanwhile, Novak returns to Ground-Pounder and attempts to betray it, but Ground-Pounder thwarts him by morphing into a humanoid titan. Arriving at San Francisco, Ground-Pounder proceeds to destroy it. Hearing the emergency, the rest of Team Arch immediately return to fight back. SpongeBob's side and the Jukailans arrive to help, but Ground-Pounder devours the Digital Heroes and the Star Alliance, prompting the Hi-Seas to jump in to save them. Meeting up with Sora and Syaoran, the Hi-Seas proceed to save the others, while SpongeBob splits from the group to confront Novak. Finding a demented Novak with the Staff and the healing pods, SpongeBob proceeds to fight him, while Sora, Syaoran, and the Hi-Seas save the Digital Heroes and the Star Alliance from being digested. As Novak attempts to finish SpongeBob, Tai and Sakura wake up from the pods, fully healed, and help SpongeBob defeat Novak, who is thrown out of Ground-Pounder and to his doom into the fires below it. Retrieving the Staff, the trio uses it to destroy Ground-Pounder from the inside. Reuniting with the others, Team Arch escapes Ground-Pounder, and sends it into space, where it explodes.
As they enter the new year during the New Year's party, Team Arch declares their entry into a new era, and their New Year's resolution to help the entire world rather than just one lone country in a more frequent manner. The movie ends with Team Arch shouting "For Planet Earth and its people!", as Avicii's 'Wake Me Up' plays.
In the post-credits scene, Ground-Pounder's disembodied head orbits around Earth, as its disembodied spirit eerily watches.
