A secret laboratory near the Arctic Circle is stolen by a mysterious vehicle using a giant magnet. The Anti-Villain League (AVL) becomes suspicious because the lab contained a mutating chemical compound, PX-41, which transforms living things into indestructible killing machines. The organization decides to recruit Gru, a former villain, to help the AVL prevent the mutating chemical from getting into the wrong hands. Meanwhile at Gru's, it is Agnes' Birthday, and the fairy Gru had scheduled for her cannot turn up, forcing Gru to dress up as a fairy to not disappoint Agnes. After the show, Agnes admits to Gru that she knew it was him dressing up as the fairy, but was acting to make sure the other kids did not find out.
After the birthday party, Lucy Wilde, an AVL agent, forcibly abducts Gru after stunning him with her lipstick taser. Two of Gru's minions who try to thwart her plans are also captured. They travel to AVL's underwater headquarters where Gru meets the league's director, Silas Ramsbottom. He asks Gru to assist them in their efforts to track down the perpetrator and the missing mutagen. Gru refuses, preferring to concentrate on his new venture of producing bottled jellies and the responsibilities of being a father to his three adopted girls, Margo, Agnes and Edith. Before he leaves, Lucy admits she was impressed by his work as a villain and gives her business card to Gru, urging him to contact her if he changes his mind.
Upon returning to his lab, Gru realizes that his minion-run production line is churning out bottles of awful-tasting jellies. Also, his research scientist, Dr. Nefario, confesses to Gru that he misses being "evil" and has been offered employment elsewhere. After giving Dr. Nefario a 21 fart-gun send-off with the minions, Gru contacts Lucy and takes on the task of recovering the stolen mutagen.
Traces of chemical scent given off by the mutagen narrow the search to the confines of The Paradise Shopping Mall. Gru and Lucy work undercover as the owners of a cupcake shop in the mall. Gru suspects one of the owners of a restaurant in the mall, named Eduardo, is an old super-villain called El Macho, who supposedly died after skysurfing a TNT-laden shark into an active volcano.
Lucy and Gru decide to break into his restaurant but are spotted by Eduardo's pet chicken and narrowly escape being detected by Eduardo when he returns to his shop late in the night. However, they find only a jar of secret-recipe salsa in his safe and nothing relevant to link Eduardo to the crime. While the team investigates wig merchant Floyd Eagle-san, Margo begins to develop a crush on Eduardo's son, Antonio, to Gru's frustration. The whole family is invited to Eduardo's Cinco de Mayo party at his mansion, and Gru's protectiveness of his daughter leads him to make baseless accusations to the AVL's Silas about Eduardo and his son, damaging his credibility.
Later that day, a determined matchmaking neighbor, Jillian, sets a reluctant Gru up on a date with her rude and superficial friend, Shannon. During the date, Shannon discovers Gru's wig and threatens to humiliate him, but Lucy saves him from embarrassment by shooting Shannon with a tranquilizing dart. They take Shannon home, and Gru realizes he is in love with Lucy. When he arrives at the mall the next day, the Anti-Villain League arrest Floyd Eagle-san, who protests vehemently that he was framed, after the AVL team uncovers the empty mutagen jar in his shop. Silas tells Gru that the case is now closed and that Lucy will be reassigned to Australia, and Lucy gives him her lipstick taser before leaving as a memento. A heartbroken Gru tells Agnes that she was right that he loves Lucy. However, Gru is unable to muster the courage to ask Lucy out before she leaves. The family then goes to Eduardo's party. Gru follows Eduardo into his secret basement and discovers that he was correct about Eduardo being the presumed-dead super-villain El Macho.
Gru also discovers that Dr. Nefario has been working for Eduardo and that the duo had been capturing and mutating some of Gru's minions into purple-furred monsters using the stolen mutagen serum. Eduardo offers Gru a chance to conquer the world, but Gru makes unconvincing excuses and hastily leaves with the girls. Margo has also broken up with Antonio as he had become interested in another girl. For breaking her heart, Gru encases Antonio in a block of ice with his freeze-ray.
Lucy, while in the plane bound for Australia, realizes that she wants to be with Gru, and jumps out to hang-glide to the party. Eduardo discovers her true identity and captures her after his chicken retrieves her AVL ID badge from her purse. Dr. Nefario calls Gru to tell him that Lucy has been captured.
Gru disguises two of his minions in purple cupcake frosting to escort him as their prisoner into Eduardo's compound in a rescue attempt. Gru manages to restore the minions who were under El Macho's control using guns full of the awful-tasting jam infused with Dr. Nefario's antidote. El Macho then drinks some PX-41 which mutates him into a monster. Gru disorients El Macho with Lucy's lipstick taser, and Gru's restored minions finish him off with PX-41 antidote guns. While Gru tries to untie Lucy, who is strapped to a TNT-loaded shark rocket, Eduardo's pet chicken triggers the launch remote, sending the pair flying towards the lava-spewing volcano where El Macho faked his death. While on the rocket, Lucy accepts Gru's date invitation before the pair dives into the safety of the ocean, just seconds before the rocket explodes.
One hundred and forty-seven dates later, the two are married and the girls finally have a mother. The minions close with a rendition of "Y.M.C.A" and "I Swear" (mistakenly sung as "Underwear") while the family dances. However, soon after the final picture is taken, a mutated purple-furred minion appears, surprising the family.
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