In London, circa 1897, a young Scottish mouse named Olivia Flaversham is celebrating her birthday with her toymaker father, Hiram. Suddenly, Fidget, a crippled bat with a peg leg, bursts in, and after a brief struggle, disappears with Hiram. Fidget takes Hiram to Professor Ratigan (who Devious Diesel works for) who commands him to create a clockwork robot which mimics the Queen of the Mice so Ratigan can rule England. Hiram refuses to take part in the scheme, whereupon Ratigan orders Fidget to capture Olivia so he can feed her to his pet cat, Felicia.
Olivia searches to find Basil of Baker Street, a world-famous detective and Ratigan's archnemesis. Returning to London after a tour of duty in Afghanistan, Dr. David Q. Dawson, Thomas, Twilight and the others (who are visiting London for a while) stumble upon Olivia, and help her find Basil's residence. Thanks to Twilight's special shrinking spell, everyone are able to get inside Basil's home. At first, Basil is reluctant, but when Olivia mentions Fidget, Basil realizes his chance to capture Ratigan. Basil and Dawson take Thomas, Twilight and the others and Toby, Sherlock Holmes's pet dog, to track Fidget's scent, where they find him in a toyshop stealing clockwork mechanisms and toy soldiers' uniforms. Fidget later traps Olivia, Luke, Spike, Apple Bloom, Sweetie Belle and Scootaloo by ambushing them from inside a toy cradle. Basil, Dawson, Thomas, Twilight and the rest of their friends pursue Fidget, but become entangled and fall behind. While searching the shop, Dawson discovers Fidget's checklist, to which Basil does some chemical tests to discover the list came from the riverfront near the Thames. Basil, Dawson, Thomas, Twilight and the rest of their friends disguise themselves as sailors and go into a tavern called the "Rat Trap" and follow Fidget to Ratigan's headquarters, where our heroes met Diesel again. Everyone are caught and Ratigan ties Basil and Dawson to a spring-loaded mousetrap connected with a Rube Goldberg machine while Thomas, Twilight and the others are in a large cage along with Luke, Spike, Apple Bloom, Sweetie Belle and Scootaloo. Ratigan sets out for Buckingham Palace, where Diesel, Fidget and his accomplices kidnap the queen. Basil, along with Dawson, deduces the trap's weakness and escape just in time.
Back at Buckingham Palace, Ratigan forces Hiram to operate the toy Queen, while the real Queen is taken to be fed to Felicia. The toy Queen declares Ratigan the ruler of all Mousedom, and he announces his tyrannical plans for his new "subjects". Just then, Basil, Dawson, Olivia, Thomas, Twilight and the others save Hiram and the real Queen, and apprehend Fidget (along with Ratigan's other henchmen). Basil seizes control of the mechanical queen, making it denounce Ratigan as a fraud and tyrant while breaking into pieces. The crowd, enraged by Ratigan's treason, start climbing onto him and defeating his shanty guards (Meanwhile, Toby chases down Felicia and delivers her straight to the Royal Guard Dogs!). Ratigan frees himself and escapes on his dirigible with Fidget, holding Olivia hostage. Basil, Dawson, Hiram, Thomas, Twilight and the others create their own craft with a matchbox and some small helium-filled balloons, held under the Union Jack. Ratigan throws Fidget (who can't fly) into the Thames River presumably to his death, and then attempts to drive the dirigible himself. Basil jumps on to the dirigible to confront Ratigan, causing him to crash straight into the Big Ben. Inside the clock, Basil rescues Olivia and safely delivers her to Hiram. Ratigan fights Basil until the clock bell tolls and Ratigan plunges, taking Basil with him. However, Basil manages to grab the wreckage of Ratigan's dirigible and save himself from falling just in time. Diesel is now forced to flee, vowing that he'll be back with revenge with his old friends.
Back at Baker Street, Basil, Dawson, Thomas, Twilight and the others recount their adventures, as well as the queen's gratitude for saving her life. Afterwards, the Flavershams leave to catch their train. Thomas, Twilight and the others say goodbye to Olivia and then to Basil and Dawson. Then as they leaves Basil's home, Twilight uses her brand new growth-back-to-normal spell on everyone so they all can now have more adventures on the horizon. As Dawson tries to leave, a distraught new client persuades both Basil and Dawson to help her. Finally, Basil proclaims Dawson to be his "trusted associate, Doctor Dawson, with whom I do all my cases".
- Devious Diesel will work for Professor Ratigan in this movie.
- In this film Fidget kidnaps Olivia along with Luke, Scootaloo, Sweetie Belle, Apple Bloom and Spike for unknown reason.
- A flashback from Thomas and Twilight Sparkle's Adventures of Beauty and the Beast was used, showing the last time that Diesel was defeated by Luke.