Charlie Hinton is a hardworking father whose wife Kim has just gone back to work as a lawyer. They enroll their child, Ben, in Chapman Academy, a very academic pre-school headed by Miss Harridan. Soon after, Charlie is laid off. In need of money, he opens up a day care center, Daddy Day Care, with the help of his best friend Phil Ryerson. At first, the local moms are suspicious of menwanting to work with children (mainly because they think they are homosexual or child molesters). But as Daddy Day Care is cheaper and more child-centered than the academy, the latter begins to lose popularity. Miss Harridan attempts to shut down Daddy Day Care by notifying child services that Charlie and Phil are not following the regulations.
Mr. Kubitz, a director of child services notifies them of the codes that need to be fixed, which Charlie and Phil quickly correct. Daddy Day Care grows in popularity and attracts more children. Mr. Kubitz informs Phil and Charlie that they need another employee to keep an appropriate ratio of children to caregivers. Luckily, Marvin, a former co-worker, had dropped by and after seeing how good he is at entertaining the children, Phil and Charlie ask him about joining. Marvin is unsure at first, but then finds himself falling for Kelli, the single mother of one of the children, and agrees.
Later, Mr. Kubitz tells them they have too many kids to stay at Charlie's residence. They find an abandoned building with potential, but do not have the money to buy it. They hold a fund raising event called "Rock for Daddy Day Care" which Miss Harridan finds out about. Miss Harridan and her assistant wreck the festival by unplugging a bouncy castle, filling the food with cockroaches, switching face paint with glue, releasing animals from the petting zoo, and turning on the sprinklers. Daddy Day Care does not raise enough money. Shortly after, Charlie and Phil are offered their old jobs back, accepting Miss Harridan's offer to take the kids