Po and the Kids are once more waylaid, this time by Mole Rats who have deemed Bao their god. But when Bao isn't able to defeat the mythical creature plaguing the Wasteland, Fan Tong steps up to save the day.
Po and the Kids agree to escort a dirigible shipment of food to a drought-torn region of China. But Nu Hai has some suspicions about Shi Long, which she finds aren't far off when she discovers the dirigible is set to explode...with them on board!
Po and the Kids make it to Gongmen City in search of the contact they heard has some info on the dirigible crash. Meanwhile, Xiao, mourning the presumed death of her new panda friends, takes off into the woods and meets a new friend.
On the Volcano Island, Po and the Kids are reunited with Li, Grandma, Ping, Rooster, Wing, and Wong, and work together to find out what's really going on the island. Xiao becomes suspicious of some of her royal workers.
The whole gang escapes pursing Guards, battles flowing lava, and survives crumbling caves and pillars to finally make it back to the Forbidden City. Xiao is ready to escape the palace, but Shi Long has other plans for her.