The tree that the chipmunks Alvin, Simon and Theodore live in is cut down and driven to Los Angeles. After JETT Records buys it, the Chipmunks meet struggling songwriter and composer David Seville who had his latest song rejected by the company's executive Ian Hawke, his old college roommate. Dave also once had a relationship with his next door neighbor, Claire Wilson.
After interrupting Dave's interview, the Chipmunks hop into a basket Dave stole from one of Ian's coworkers and follow him home. Once there, Dave discovers the Chipmunks and kicks them out, only to hear them sing "Only You (And You Alone)". He then makes a deal with them; they sing the songs he writes, and he provides food and shelter for them. Unfortunately, when Dave tries to present the Chipmunks to Ian, they fail to sing to him on account of stage fright. The day gets worse as Dave is dismissed as the Chipmunks ruin his job presentation by having drawn on it. When Alvin tries to set the mood for Dave's dinner with Claire, things become peculiar and she rejects Dave after he tells her about the Chipmunks. To make it up to Dave, the Chipmunks go to Ian in an attempt to get a record deal.
Once the Chipmunks sing Dave's song to Ian, Ian signs them to the label and calls Dave the next day. After a few singles, the Chipmunks are an international success. When Dave expresses concern for their well-being and insists that the Chipmunks are "children" who do not need so much craziness in their lives, Ian convinces the Chipmunks that Dave is holding them back. After a misunderstanding with Dave, they go live with Ian. They are enchanted with Ian at first, but once they set off on a nationwide coast-to-coast tour, he takes advantage of their naïvete, changing their image and working them constantly. Meanwhile, Dave misses the Chipmunks and he wishes they would come back home. He calls Ian and asks to talk to them but Ian refuses, and then conceals Dave's motives from the boys, saying that he sent Dave tickets but that Dave sent them back. Later, the fact that the Chipmunks are becoming worn out is all over the news. Angered by what Ian has done to the three, Dave decides to take matters into his own hands by infiltrating their concert to reunite with them.
On the night before the big concert that is to transition the coast-to-coast tour into a world tour, a vet explains to Ian that the Chipmunks' voices have worn down due to exhaustion, and suggests that they take a long rest. Rather than cancel the concert and hand out refunds, Ian advises the Chipmunks to lip sync. With Claire's help, Dave sneaks into the concert, but gets ejected by security. Seeing the commotion, the Chipmunks realize that they've been tricked and, deciding that they have had enough of Ian, they stall the concert. Ian locks them in a cage and prepares to take them to the world tour. Dave tries to convince Ian to let the boys go but Ian refuses. Ian then leaves in his limo with the boys and Dave chases them but the boys have already escaped to Dave's car. Dave immediately pulls over and admits that he loves them like his own family. Meanwhile, Ian looks in the cage and is shocked to see the boys have replaced themselves with international merchandising dolls.
Later that night, the boys are fully accepted as part of the family, and they invite Claire over for dinner again. Alvin accidentally creates a short circuit after having difficulty opening a champagne bottle. Though Dave decides not to say his catchphrase, the short circuit causes a blackout in the kitchen. As a result, Dave can no longer prevent it and finally yells out his catchphrase, "ALLLLVINNN!!", to which Alvin responds with "Okay!".
It was released worldwide on December 14, 2007 by 20th Century Fox and produced by Fox 2000 Pictures, Regency Enterprises and Bagdasarian Company.