Sergeant Keroro, leader of a small platoon of frog-like alien soldiers from the planet Keron, has largely abandoned his mission to conquer Earth, known to his kind as Pekopon. Instead, he spends his days obsessing over plastic Gundam models while living under the roof of the Hinata family in Tokyo. During a routine trip to buy a new model with the eldest son, Fuyuki, the two discover a mysterious shrine. Inside, Keroro accidentally stumbles and breaks an ancient vase. The following day, strange events begin plaguing the city as citizens fall into a mysterious panic.

The shattered vase had contained Kiruru, an ancient and ultimate weapon from Keron long thought sealed away. This destructive entity begins to spread its influence by marking people, including Keroro and Fuyuki, with a red X symbol. These marks grant telepathic abilities called Revocommi, which initially seems fascinating but quickly leads to societal collapse as people become overwhelmed by each other's negative thoughts. The city grinds to a halt as citizens withdraw in depression.

A new Keronian named Mirara, who holds the secret of the weapon, arrives to explain the dire situation. Kiruru feeds on negative human emotions such as conflict, pain, and worry. As these feelings spread across the city, Kiruru grows stronger, transforming into a colossal monster that rampages through the metropolis. Mirara reveals that the only way to reseal Kiruru is through the power of strong friendship and mutual trust.

As Kiruru absorbs enough dark energy and begins to multiply, the Keroro Platoon attempts a direct assault but fails to even scratch the creature. After Kiruru reduces the Hinata household and Keroro's beloved model collection to ruins, the bond of friendship between Keroro and Fuyuki causes the red X marks on their heads to disappear. This positive energy provides the key to stopping the weapon. With Mirara transforming into a seal, Keroro and Fuyuki work together to reach the heart of the monster. By combining their strength and inserting the seal into the core of the Kiruru tower, they manage to trap the ancient weapon once more, causing the creature and all the red marks across the city to vanish in a brilliant flash of light.