
Po is a chubby panda who works in the noodle restaurant owned by his goose father Mr. Ping. He is also a kung fu fanatic with secret dreams of becoming a great master in the discipline, but Po's defining characteristic appears to be that he is the clumsiest of all the animals in ancient China. Mr. Ping hopes that Po will one day take over the restaurant.
The tortoise Master Oogway has a premonition that the evil snow leopard warrior Tai Lung, the former student of his own protégé Master Shifu, will escape from prison and return to threaten the Valley of Peace. While Shifu sends Zeng, a messenger goose, to Chorh-Gom Prison to have the security increased, Oogway orders a formal ceremony to choose the mighty Dragon Warrior who can defeat Tai Lung. Everyone assumes that one of the Furious Five — Tigress, Monkey, Mantis, Viper, and Crane — a quintet of supremely skilled martial artists trained by Shifu, will be chosen for this honor.
While the Five demonstrate their skills at the ceremony, Po finds himself locked outside the walled palace square. He attempts desperately to gain entry through a series of increasingly foolhardy methods. He finally does get over the wall by making a chair out of fireworks, lighting them and waiting for Oogway to choose the Dragon Warrior. Suddenly the chair zooms into the air with Po and burns up, leaving the charred panda to crash into the center of the arena. Inspired by this sudden appearance, the old master designates Po the Dragon Warrior to everyone's shock.
Despite Po's protests and Shifu's pleas to reconsider, Oogway stands by his decision.
Revolted at having this slovenly and obese noodle vendor with no martial arts training whatsoever under his tutelage, Shifu attempts to discourage Po by berating and humiliating him into leaving, including threatening to use the apparently deadly "Wuxi Finger Hold" on him. The Five, profoundly disappointed at being upstaged by the panda, similarly dismiss Po as a worthless interloper.
Revolted at having this slovenly and obese noodle vendor with no martial arts training whatsoever under his tutelage, Shifu attempts to discourage Po by berating and humiliating him into leaving, including threatening to use the apparently deadly "Wuxi Finger Hold" on him. The Five, profoundly disappointed at being upstaged by the panda, similarly dismiss Po as a worthless interloper.
Although he becomes aware of Shifu's true intentions and is deeply hurt by his heroes' disdain for him, Po endures their abuse willingly for the growing dream to become something better than the failure he thinks he is, gradually earning some sympathy from them. In addition, Master Oogway, still certain that the clumsy panda is the right choice, strengthens Po with sage advice to encourage the panda to believe in himself. Eventually, the affable Po endears himself to the Five (except for the extremely disdainful Tigress) with his tireless tenacity, good cooking, and sense of humor.
Meanwhile, Zeng's errand backfires disastrously when a tour of the prison given to him by the overly confident head of security, Commander Vachir
Overhearing the argument between Po and Shifu, the Five take it upon themselves to intercept Tai Lung, especially Tigress, who is confident in her training. After a long night of pondering, Shifu discovers the following morning that Po is capable of impressive physical feats when motivated by food. Realizing that he has found the right focus for the panda, Shifu leads Po to the countryside for an intensive training regime in which Po is offered food as a reward for learning his lessons properly. Thus motivated, Po learns swiftly and finally becomes a talented martial artist in his own right.
The Five battle Tai Lung but are eventually beaten and paralyzed with a specialized nerve-striking technique. When they return defeated, Shifu finally decides Po is ready to take the villain on and gives him the sacred Dragon Scroll, which promises great power to the possessor. When Po opens it, he finds nothing but a blank reflective surface. Stricken with despair at the scroll's apparent worthlessness, Shifu orders his students to evacuate the village while he stays to delay Tai Lung from pursuing them for as long as he can.
As Po participates in the evacuation, he comes across his father, who tries to cheer him up by telling him the secret ingredient of the family's popular noodle soup: nothing whatsoever. Things become special, he explains, because people believe them to be special. Realizing that this truth is the very point of the Dragon Scroll, that the power promised is already inside him, Po rushes off to help Shifu. At this time, Tai Lung confronts Shifu and savagely fights and berates him for his perceived betrayal of not arguing with Master Oogway's rejection of Tai Lung as Dragon Warrior.
To remedy that, Tai Lung wants the Dragon Scroll for himself to complete his training. While fighting, he expresses that he gave in to his aggression and anger so he could make Shifu proud of him. For his part, Shifu is crippled by his profound feelings of guilt and responsibility for his former protégé, whom he loved like a son, turning to darkness.
Tai Lung angrily discovers the Scroll is gone, and before he can kill his former mentor, Po arrives to challenge him as he had already believed in himself. Although the snow leopard scoffs at the fat panda being the Dragon Warrior, the ensuing fight proves Po to be an extremely formidable opponent. Despite Po's skill, Tai Lung temporarily stuns him and gains the Dragon Scroll, but is horrified when he examines it, unable to understand its symbolism. As he recovers, Po delivers some words of wisdom to strengthen Tai Lung's spirit when he reveals his comprehension of the deeper wisdom of the scroll. Deeply frustrated with an apparently useless prize and having worked so hard for the "Powerful" Dragon Scroll, Tai Lung tries to subdue Po with his nerve strikes.
However, the attack proves useless on the panda, as his nerves are "hard to find" due to his body fat. Emboldened, Po effectively counter-attacks with a unique improvised combat style that takes advantage of his girth to absorb and deflect the force from Tai Lung's attacks back at him. In the end, Po uses the Wuxi Finger Hold on Tai Lung (which he claims to have "figured out" on his own) and uses his catchphrase, "Skadoosh!", defeating him with a devastating explosion that ripples through the valley.
The Five return to the valley to investigate the cause of the explosion and find a slightly dazed but triumphant Po. Deeply impressed at Po's victory, Tigress leads the Five to acknowledge the panda as a Kung Fu master. The villagers, including Po's father, follow suit and hail Po as a hero. Po remembers his teacher is wounded, and rushes back to Shifu, who is now finally at peace, though he is not dead ("I'm not dying, you idiot!...er, Dragon Warrior. I am simply at peace.") — he is only resting after such a trying battle. Po lays on the floor with him for a few seconds, then finally asks if he would like to go and get something to eat; Shifu takes him up on the offer.

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