In a world where humans and anthropomorphic animals co-exist, cool-headed pickpocket and robber Mr. Wolf leads The Bad Guys, a gang of infamous criminal animals who commit brazen thefts and evade the authorities, due to the public's interpretation of them as inherently "bad" animals.

After being insulted by Governor Diane Foxington on live television, Wolf convinces his gang to pull off a heist to steal a valuable award called the Golden Dolphin before it's awarded to guinea pig philanthropist Professor Marmalade at a gala. During the heist, Wolf inadvertently helps an elderly woman and is praised for the good deed, leading to Wolf becoming feeling weird at having done a good deed. After the gang is exposed and arrested, Wolf persuades Marmalade with Foxington's approval to reform them, planning to take advantage of the pretense to steal the award again.

Marmalade invites the gang to his home, but they struggle with his lessons, unable to adapt to good behavior. After a "heist for good" to rescue a herd of guinea pigs from a research lab fails due to Wolf's second-in-command, Mr. Snake, eating them, Foxington decides to call off the experiment but relents when Wolf confesses that he became a criminal because he despises being hated for his species; she admits she understands and has hope for him. Wolf contemplates the matter and finds himself rescuing a cat from a tree, which Marmalade records and publishes, turning the public image of the gang around. However, Snake fears that he is losing touch with his friend.

The gang executes a new heist to steal the award again during a gala, but Wolf cannot bring himself to finish the plan, and decides to reform for real. Suddenly, a meteorite on display goes missing, causing the gang to be blamed for the theft. When they are arrested, Marmalade meets them in private and reveals that he stole the meteorite and had planned for the gang to take the blame, and that he was the old woman Wolf had helped. In prison, Wolf explains to his gang that he does not want to be a criminal anymore and that they can improve, but Snake refuses, believing that the world will never see them as anything other than monsters. Their fight is interrupted when a mysterious person, later found to be Foxington, rescues them. Wolf then identifies her as The Crimson Paw, a criminal mastermind who suddenly stopped committing crimes.

Upon reaching safety, the gang abandons Wolf when they refuse to accept that they can change. When they return to their hideout, they find it completely emptied of their loot, as Wolf revealed its location to Foxington earlier at the gala as compensation for his crimes. After Snake willingly gives the childish Mr. Shark his last push pop out of kindness, the others realize that they can change their ways and proceed to help Wolf. However, Snake denies it and abandons them to ally with Marmalade, who plans to use the meteorite to power a mind-control device to hypnotize an army of guinea pigs into stealing his own charity funds.

Meanwhile, Foxington reveals to Wolf that she reformed when she attempted to steal the Golden Dolphin herself but realized that she was only what everyone saw her as, and then decided to instead help people. Wolf and Foxington break into Marmalade's home to steal the meteorite, only to be captured by Marmalade and Snake. They are rescued by the rest of the gang, and then steal the meteorite while foiling Marmalade's heist.