With their mission to capture all 624 experiments and repurpose them on Earth completed, Lilo, Stitch, Jumba and Pleakley are honored as heroes by the Galactic Alliance. Jumba is given the confiscated key to his laboratory again, Pleakley is offered a post as chairman of Earth Studies at G.A.C.C. (Galactic Alliance Community College), and Stitch is made the Captain of the Galactic Armada and commander of his newly commissioned ship BRB-9000 (Big Red Battleship 9000). Lilo is made Galactic Federation Ambassador to Earth and sole guardian of Stitch's "cousins". Before they leave, Lilo gives Jumba her favorite Elvis record, Pleakley a paperweight (which is actually an Earth rock) and Stitch a necklace with a Kū tiki (the Hawaiian god of strength).
In his ship, Gantu has decided that since he failed in capturing all of the experiments (except for 625), he will break Dr. Hämsterviel out of prison. He takes the two-man space shuttle, leaving 625 alone and helps Hämsterviel escape from prison. Stitch is then assigned to recapture Hämsterviel. Hämsterviel and Gantu burst into Jumba's lab and force Jumba to create an evil twin of Stitch, Leroy, to defeat the Galactic Alliance. Stitch arrives and after a fight, he is defeated when Pleakley appears at an inopportune moment, distracting Stitch long enough for Leroy to lock him in a glass capsule. Hämsterviel reveals his plans to clone an army of Leroys to take over the Galactic Alliance. Before leaving for Turo, Hämsterviel locks Jumba, Pleakley and Stitch in Pleakley's ship, and sends the vessel into a black hole.
On Earth, Lilo decides to contact Stitch. Lilo realizes that the only intergalactic videophone on the planet available is in Gantu's ship. There, she finds 625 and asks to use the videophone. However, 625 says it is broken. Lilo then names 625 "Reuben". He thereafter consents to help Lilo. Once the videophone is fixed, Lilo contacts the BRB-9000. Leroy impersonates Stitch, using shape-shifting to disguise himself, but fails because he does not have Stitch's tiki necklace. Hämsterviel then commands Leroy to go to Earth and capture all of the other experiments to destroy them. Lilo, sensing Stitch is in trouble, asks Reuben for help in fixing Gantu's ship. As Jumba, Pleakley, and Stitch head towards the black hole, Stitch escapes and frees the others. However, the navigational computer is locked on course for the black hole and will teleport them to a volcanic planet where they will be vaporized, but if they can disrupt the event horizon by throwing a small object into the black hole, it will send them somewhere else. Pleakley pulls out the rock that Lilo gave him and asks if this will work. After Jumba says it is too heavy, Stitch takes a bite out of it, then crawls out the front of the vehicle and throws it at the black hole. There is a flash and the vehicle is sucked in.
On Earth, a Leroy clone obtains Lilo's scrapbook of "cousins" and quickly captures all of them (along with Mertle). Lilo and Reuben arrive at Turo, but they are too late; Hämsterviel has taken over, making the Grand Councilwoman his receptionist, and orders Gantu to lock them up. Gantu imprisons Lilo and Reuben, but decides to release them after Hämsterviel fires him. After a close call with several Leroy clones, they are trapped. All is lost until the G.A.C.C. van suddenly appears. With no time to explain, Lilo, Reuben and Gantu all climb in and head for Earth. On Earth, the original Leroy has herded all the experiments into a large stadium where "Alohapalooza" will take place. The BRB-9000 appears and Hämsterviel prepares to obliterate all of the experiments, until a timely appearance by Lilo, Stitch and the others and destroy the BRB's primary cannon. Hämsterviel reveals that he brought along his Leroy army as backup. Stitch rallies his "cousins" and the battle begins. Despite some initial victories by the experiments, it soon becomes apparent that the adversaries are better than them. Jumba remembers that he programmed a secret shutdown command into Leroy: If he plays Elvis Presley's "Aloha ʻOe", the others will deactivate. Stitch appears on-stage in his Elvis attire and plays "Aloha ʻOe" with Lilo and Reuben accompanying him, causing the Leroys to have violent seizures and shut down. With his plan foiled (again), Hämsterviel is recaptured.
Back at the Galactic Alliance HQ, they are proclaimed "Heroes of the Alliance". Stitch, Jumba and Pleakley ask to be allowed to return to Earth with Lilo. The Grand Councilwoman grants this and asks Gantu if he would like to be reinstated as the Captain of the Armada. Gantu agrees on the condition that Reuben be assigned as his galley officer. Back on Earth, Lilo sets up for one last picture. Mertle arrives with Gigi (during the battle, Mertle was with Gigi and was astounded when she found that Gigi could talk, being one of Jumba's experiments). Lilo's last picture in the album is of all of the experiments still on Earth, Mertle, Jumba, Pleakley, Nani, David and herself. Meanwhile, Hämsterviel is sent back to prison along with Leroy and all of his clones, who have recovered from their seizures, and are dancing to the song "Jailhouse Rock". As the credits roll, a full list of Jumba's experiments 001 through 626, and the names they were given by Lilo (and other characters in some instances during Lilo & Stitch: The Series), scrolls along the left side of the screen.
When Stitch, currently captain of the B.R.B. 9000, rendezvouses with the Grand Councilwoman, she points out that he has coconut cake on his uniform, hinting that Stitch had brought some coconut cake with him on his journey prior to leaving Earth.
A mildly humorous running gag features Dr. Hämsterviel and Gantu lecturing each other on the nature of rhetorical questions.
According to Hämsterviel, ever since Gantu worked for him, he failed for three years trying to catch an experiment, referencing the events of the show Lilo & Stitch: The Series being released in 2003 and ending in 2006, as well as the movie itself.
The coordinates for the black hole are "[tel:12-21-9-7-9]", which is a reference to the release date of the film The Black Hole (December 21, 1979).
Cannonball and Gigi have powers that were never used in the series: Cannonball having the ability to roll into a ball in midair, and Gigi having the ability to talk.
The end credits of the film reveal all 626 experiments, beginning from 001 (Shrink) all the way up to 626 (Stitch), scrolled upwards in the same direction as the end credits on the left of the screen. However experiments 627, 628 and 629 are notably left out of this experiment list for reasons unknown.
Experiment 000 (Cyber) is not mentioned in this Experiments list either, as he has not appeared yet in the franchise and is created exclusively for the Stitch! anime.
Though 627 does not appear physically in this film nor is he mentioned in the Experiments list in the film's end credits, he is mentioned by Jumba and Gantu in one scene of this film.
David Kawena only appears at the very end of the movie, making this his only non-speaking role in the Lilo & Stitch franchise.
This also marks David's final appearance in the franchise.
There are many duplicates or recolors and slight edits of existing experiments seen during the battle, along with some that aren't experiments at all. Viewers can see multiple orange replicas of Angel, duplicates of Nosox, Dupe, Crystallene, Yaarp, Hunkahunka, Digger, many different colored replicas of Cannonball, Snooty, Kernel, Nosy, Slick, a blue Deforestator and many others. It is possible that with the film's small production budgets, it would be too complicated to design them individually, so they did that.
When a Leroyclone is capturing the experiments, Drowsy and Backhoe are both the same shape when they're blasted into nets. Also, their feet disappear instead of leaving the ground as the net traps them into it.
Cannonball doesn't hold on to his feet when bouncing on his butt.
Tickle-Tummy was somehow forgotten to be added on the list of experiments at the end credits, and most fans thought Tickle-Tummy was 628, but Tickle-Tummy is actually 275.
Fudgy's number was originally "119", but somehow it changed to "054" on the list of experiments.
Stopgo's number was originally "239", but somehow it changed to "102" on the list of experiments.
Just like in Stitch! The Movie, Lilo's dress appears to be colored differently on this film's VHS and DVD covers compared to in the final film - while on the film's VHS and DVD covers Lilo's dress is colored yellow with the Hawaiian leaves colored green, while in the actual film Lilo's dress is colored red with the Hawaiian leaves colored white, just like in theotherfilms.