The film opens with a faithful recreation of Rosalina's storybook, which immediately delivers a massive twist to the established video game lore: Princess Peach and Rosalina are actually sisters, born from compressed stardust. Rosalina sent Peach to the Mushroom Kingdom long ago to protect her from evil cosmic forces that sought to exploit their shared power.
The climax revolves around Bowser Jr. successfully capturing Rosalina's Lumas and using their cosmic energy to power a universe-destroying weapon meant to restore his miniaturized father, Bowser. The combined efforts of Mario, Luigi, Yoshi, and their pilot Fox McCloud manage to thwart the weapon in a massive, zero-gravity battle. The film ends with the universe saved and the Mario universe permanently expanded, underscored by two post-credits scenes. The mid-credits scene features the return of the fan-favorite nihilistic Lumalee, while the post-credits scene teases even more Nintendo characters for future cinematic crossovers.