To save it from being put to death, Professor Albert Dooley takes home a dumb duck from the research laboratory, which accidentally was exposed to X-rays. At home he discovers that it lays now golden eggs. Since he's broke all the time, his family welcomes this new source of income greatly, and tries to keep it secret. But their greedy neighbors become suspicious.

Herbie, the Volkswagen Beetle with a mind of its own, is racing in the Monte Carlo Rally. Unbeknownst to Herbie's driver, thieves have hidden a cache of stolen diamonds in Herbie's gas tank, and are now trying to get them back.

Pete Stancheck inherits from his Uncle Jim Douglas a race car being stored in Puerto Vallarta. With his friend Davy Johns (D.J. to his friends) accompanying him to P.V., Pete is dismayed to learn that the car is an older model Volkswagen Beetle. But when Pete and D.J. see what the car can do and learn that it somewhat has a mind of its own, they decide to enter it into the Brazil Grand Primeo formula one race. En route to Rio de Janeiro, Herbie, the car, gets Pete and D.J. into one predicament after another as it tries to help its new friend, a streetwise orphan named Paco, who Pete and D.J. encountered in P.V. and who stowed away in Herbie's trunk. Because of these predicaments, Pete and D.J. end up requiring a quick influx of cash and slyly enlist the help of wealthy Louise Trent and her bookish niece, anthropology doctoral candidate Melissa, to be their financiers. Pete's role in the scheme is to woo the shy Melissa...