Mac Radner and his Australian-born wife Kelly are adjusting to life with their infant daughter, Stella. The restrictions of parenthood make it difficult for them to maintain their old lifestyle, which alienates them from their friends Jimmy Blevins and his ex-wife, Paula. Delta Psi Beta, a fraternity known for outrageous parties, moves in next door. The fraternity’s leaders, Teddy Sanders and Pete Regazolli, aspire to join Delta Psi’s Hall of Fame by throwing a massive end-of-the-year party.
The Radners ask Teddy to keep the noise down, and to earn their favor, he invites them to join the party. Kelly meets Teddy’s girlfriend Brooke Shy, and Teddy shows Mac his bedroom, which includes a stash of fireworks and a breaker box that controls the house’s power. Teddy agrees to manage the noise, but has Mac and Kelly promise to always call him instead of the police. The following night, when the party next door keeps Stella awake, Mac is unable to reach Teddy. Kelly convinces Mac to call the police anonymously, but Officer Watkins identifies them to Teddy. Betrayed, Teddy leads Delta Psi in hazing Mac and Kelly, resulting in Stella nearly eating an unused condom after the fraternity dumps their garbage on the Radners’ lawn. Mac and Kelly go to the college dean Carol Gladstone, but the school has a “three strikes” policy before it will intervene; Delta Psi’s first strike was burning down their old house.
Failing to force the fraternity to move by damaging their house, Kelly manipulates Pete and Brooke into having sex, and Mac leads Teddy to catch them in the act. Teddy and Pete fight, and a barbecue grill injures a passing professor. This gives Delta Psi their second strike and places them on probation, effectively ending their party plans. Determined to shut down the fraternity, Mac and Kelly enlist the help of Jimmy, who is jealous that Paula is sleeping with Delta Psi member Scoonie. To acquire evidence of Delta Psi’s hazing, they hire a pledge nicknamed Assjuice to stand up to Teddy and record him threatening retaliation. When Teddy instead shows him kindness, he reveals that Mac and Kelly hired him and are trying to sabotage the fraternity. A vengeful Teddy violently pranks the Radners and Jimmy with airbags.
They send Teddy a counterfeit letter from Gladstone lifting Delta Psi’s probation. The fraternity prepares for their end-of-the-year party, which Mac, Kelly, and Jimmy widely publicize to ensure it will be out of control. Once the party is in full swing, they notify the police, but Teddy realizes what the Radners have done, and stops the party just as Watkins arrives. Jimmy throws himself from the balcony to distract Teddy, allowing Kelly to sneak into Teddy’s bedroom as Mac fights him off. Unable to open the breaker box to restart the party and alert Watkins, Kelly shoots one of the fireworks at his patrol car. Paula convinces Scoonie to turn on the power, reigniting the party, and she reunites with Jimmy. Teddy takes the blame for the party, convincing Pete to flee with the others, and is arrested; the fraternity is shut down.
Four months later, Mac runs into Teddy, who is working as a shirtless greeter at Abercrombie & Fitch. They greet each other warmly and Teddy reveals he is attending night classes to complete his degree. Mac takes off his shirt and jokingly acts as a greeter with Teddy. Later, Mac and Kelly take pictures of Stella in various costumes for a calendar. They get a call from Jimmy and Paula inviting them to attend Burning Man. Mac and Kelly decline, accepting their new roles as parents.