Mr. Popper's Penguins is the story of a house painter named Mr. Popper who is gifted a penguin from a South Pole explorer. One penguin turns into twelve penguins, and Mr. Popper puts on a stage show with the penguins to help pay for their upkeep.

Mr. Popper is a dreamer who loves tales of adventure, particularly about the Poles. He writes a letter of praise to Admiral Drake, a famous explorer of the Poles, and Drake sends Mr. Popper a penguin in the mail. Mr. Popper names him Captain Cook after another explorer. Mr. Popper next gets a grumpy service man to drill air holes in the family icebox so that Captain Cook has a cold place to nest. Captain Cook is very inquisitive, and he sticks his nose into all corners of the house.

Despite his cold icebox nest, Captain Cook becomes mopey and despondent, falling ill. Mr. Popper writes to the curator of an aquarium for help, and the curator responds by sending Mr. Popper another penguin, figuring that maybe the cause of the sickness is loneliness. This second penguin is named Greta. Sure enough, Captain Cook improves with company, and soon the two penguins have babies, ten in all, for a total of twelve penguins in the house. Mr. Popper converts the entire basement to an icy environment with a freezing machine.

The freezing machine and all the related expenses of feeding and housing the penguins prove too much for the family's finances. Mr. Popper has the idea to start a stage show with the penguins. The Poppers take the time to train the penguins, coming up with a three-act show: marching, a "boxing match" starring two penguins, and climbing (and then sliding down) ladders. The Poppers take their penguins to a local theater, where the owner, Mr. Greenbaum, loves the act and decides to hire them for a nationwide tour.

The family enjoys touring the country, and the penguins become a sensation. But Spring is coming, and the penguins are getting restless. In a final stop on the tour, in New York City, the Poppers travel to the wrong theater and disrupt a show that's going on. Mr. Popper and the penguins are arrested for disturbing the peace, and they spend a short time in jail.

Admiral Drake arrives from an expedition to bail Mr. Popper out of jail. Drake wants to take the penguins to the North Pole to start a new breed and keep the government personnel there company. At the same time, a movie man, Mr. Klein, offers Mr. Popper a great deal of money to feature the penguins in movies. Mr. Popper, figuring Hollywood would take a toll on the penguins, chooses to give the penguins to Drake. However, Drake wants Mr. Popper to accompany him as well. Getting his Arctic adventure at last, Mr. Popper leaves his family to establish a penguin colony in the North Pole.