Britt Reid (Seth Rogen) is the irresponsible, 28-year-old slacker son of widower James Reid (Tom Wilkinson), publisher of the Los Angeles newspaper The Daily Sentinel. Britt's attitude changes when James is found dead from an allergic reaction to a bee sting. After the funeral, Britt fires the staff aside from his maid, but later re-hires Kato (Jay Chou), James' mechanic and a skilled martial artist.
Britt and Kato get drunk together and, upon agreeing that they both hated James, visit the graveyard to cut the head off James' memorial statue. After they succeed, they rescue a nearby couple being mugged. When police mistake Britt and Kato themselves for criminals, Kato evades them in a car chase as he and Britt return to the mansion.
Britt convinces Kato they should become crime-fighters who pose as criminals in order to infiltrate real criminals, and to prevent enemies from using innocents against them. Kato develops a car outfitted with several gadgets and weapons, which they call the Black Beauty. Britt plans to capture Benjamin Chudnofsky (Christoph Waltz), a Russian mobster uniting the criminal families of Los Angeles under his command, and whom his father was trying to expose. To get Chudnofsky's attention, Britt uses The Daily Sentinel as a vehicle to publish articles about the "high-profile criminal" the Green Hornet.
Britt hires Lenore Case (Cameron Diaz), who has a degree in journalism and a minor in criminology, as his assistant and researcher, and uses her unwitting advice to raise the Green Hornet's profile. Britt and Kato blow up several of Chudnofsky's meth labs, leaving calling cards so Chudnofsky can contact them. Throughout all this, The Daily Sentinel managing editor Mike Axford (Edward James Olmos) fears this single-minded coverage will endanger Britt's life, and District Attorney Frank Scanlon (David Harbour) frets over public perception that he cannot stop the Green Hornet.
Britt asks Lenore out, but she rebuffs him and instead invites Kato to dinner, making Britt jealous. Kato learns from her that mobsters often offer a peace summit to rivals in order to get close enough to kill them; Britt then tells Kato that Chudnofsky has offered them such a meeting. Kato tries dissuading him, but Britt, feeling overshadowed, follows his instincts. This nearly proves fatal when Chudnofsky tries to kill them.
Barely escaping to the mansion, Britt and Kato argue and fight, and Britt fires both Kato and Lenore, whom he believes are in a relationship. Kato receives an email from Chudnofsky on the Hornet's calling-card email address, offering $1 million dollars and half of Los Angeles if he kills Britt. Meanwhile, Britt discovers Scanlon is corrupt, learning that he tried to bribe James into downplaying the city's level of crime in order to help his career.
Scanlon invites Britt to meet in a restaurant, where he reveals he murdered Britt's father. Kato arrives, and instead of killing Britt attacks Chudnofsky's men, allowing him and Britt, whom Chudnofsky deduces is the real Green Hornet, to escape. At The Daily Sentinel, Britt intends to upload a recording of Scanlon's confession onto the Web — and belatedly discovers he did not manage to record it. Chudnofsky and his men, who followed the duo there, engage them in a firefight. Kato ultimately stabs Chudnofsky in self-defense and Britt shoots him to death. A SWAT team appears and fires at the Green Hornet and Kato, who use the remains of their nearly demolished Black Beauty to run Scanlon out the 10th-floor window, killing him. The Green Hornet and Kato flee to Lenore's house, where she learns their secret identities and that she has been the accidental mastermind behind the Green Hornet's plots. Despite being furious, she helps them hide from the police and tends to Britt's shoulder gunshot wound.
The next morning, Britt promotes Axford to editor-in-chief and stages being shot in the shoulder by Kato, further establishing the Green Hornet as a threat (and allowing Britt to get treated by professionals in a hospital). Later, the two weld James' stolen bust back onto his memorial statue. Now with Lenore to aid them, Britt and Kato vow to continue protecting the law by breaking it.