The Eds' most recent moneymaking scheme has Gone Horribly Wrong, and has left the cul-de-sac in a state of horrendous devastation, and its victims horribly maimed. Enraged by the Eds' trickery, the children of the cul-de-sac decide to rid themselves of the boys once and for all. The frenzied Eds prepare their escape, gathering in the bedroom of Eddy's elusive older brother in order to seek refuge with the door powerfully locked and chained. With very limited options and time, the frantic Eds resort to taking off in the red car parked in the bedroom, powered by Ed (who has jammed his feet through the floor of the vehicle due to the boys' inability to get it started). The kids are too late to stop The Eds from escaping. After they escape, Ed, being himself, crashes the car into a giant rock in the middle of nowhere, damaging it beyond repair and leaving the Eds stranded and forced to travel on foot. They soon decide to search for Eddy's brother as a means of finding shelter and protection from the other kids.
Meanwhile, the children from Peach Creek resort to their own means of locating Ed, Edd and Eddy, including Jimmy and Sarah, who loathe the Eds but were not affected by the destructive scam. Jonny and Plank masquerade as their respective superhero alter-egos, "Captain Melonhead and Splinter the Wonderwood," Rolf leaves with overflowing luggage riding on the back of his pig Wilfred, and Kevin and Nazz travel through the use of Kevin's prized bicycle.
Sarah and Jimmy encounter the Eds' Abhorrent Admirers, the Kanker Sisters who go on to interrogate them. Upon learning from Jimmy of the kids' intentions with regards to their "boyfriends," the Kanker Sisters embark on the journey as well in order to protect the Eds from the wrath of the other kids, using Sarah and Jimmy as slaves. In the meantime, the Eds, having no idea as to the whereabouts of Eddy's older brother, are left to aimlessly wander under Eddy's guidance, until a clue from Eddy's wallet leads them to travel to a factory manufacturing gag gifts located in Peach Creek's rival town, Lemon Brook, believing that he may be there. Although the boys fail to locate Eddy's brother, they clown around with the various toys they find in the abandoned factory until leaving.
Along the way, the other cul-de-sac kids encounter obstacles on their search in locating the Eds; Wilfred grows tired of Rolf's abuse and later attacks and then leaves him to be literally tied up in his luggage; Nazz grows increasingly aggravated with Kevin caring more for his bicycle than her, and the Eds have very limited clues to follow related to the possible whereabouts of Eddy's brother. The Eds grow frustrated with one another over the course of the journey, and after Edd is fooled into believing that Eddy and Ed have sunk to their deaths in quicksand, he is agitated into giving up on the quest and returning home, saying he'd rather take his punishment from the other kids than stay with the other two any longer.
Ed bawls over their shattered friendship, and tears start welling up in Eddy's eyes as the the gravity of his mistake sinks in. He urges Edd to leave, saying that he can't blame him for doing so, since all the trouble they had been put through was Eddy's fault to begin with; he then fully breaks down into Tears of Remorse. Eddy's humility prompts Edd to turn back around, pardoning his friends for their selfish and deceptive behavior. They proceed onward with their adventure, camping out overnight in an ornamentally designed Tiki environment.
As the Eds' journey continues, they come across an amusement park called "Mondo-a-Go-Go" which Edd links to a postcard mailed to Eddy by his brother, and they conclude that they have successfully located his brother, living in a trailer designed to resemble a whale. However, their enemies (both the kids and the Kanker sisters) arrive at the same location in time to meet Eddy's brother, who reveals himself to be sadstic, cruel, and abusive towards his younger sibling and beats him mercilessly, indicating that Eddy is virtually no different than his brother. Disgusted with his personality, Edd and the other kids try to stand up to Eddy's brother on Eddy's behalf while Ed, displaying a rare moment of intelligence and deliberate violence, pulls a pin out of the door hinge Eddy was holding on, sending him flying over to his older sibling and knocking him out with the door.
Eddy then confesses his reasons for acting so obnoxious and selfish throughout the series: he had only ever wanted to gain admiration and acceptance, and so lied about his brother's true nature. Touched by Eddy's confession and subsequent apology, the children finally accept the Eds, and Jonny ultimately takes their place as the cul-de-sac outcast after he attacked the Eds, believing that they are still despised (he arrived in a bus Plank was driving and was appearing as his Captain Melonhead persona). The children carry the Eds home singing the "Friendship Song," while the Kankers stay behind to torture Eddy's brother some more.
In the post-credits scene, Jonny, angry after all of the kids hurt him, abandons his Captain Melonhead persona and adopts a super villain alter-ego, "The Villainous Gourd," only to be informed by Plank that they don't have any time left remaining in the film.