The movie starts with a dad checking on his two kids before school. Their family includes a girl, boy, artist father, and campaigning mother, and a dog named Beethoven, who they are keeping for a relative family. The children love Beethoven, but their parents don't, and want to get rid of him. So the children begin taking the dog to Obedience Training led by a former army sergeant. Brennan falls in love with a girl (Hayley), while Beethoven literally destroys the obstacle course in one day. To top it all off Beethoven hits the army sergeant in the crotch with a leash causing him to kneel over in pain.
Meanwhile, the rich Sedgewick family owns a pampered pup that looks exactly like Beethoven, named Michelangelo. Michelangelo and young Madison Sedgewick are friends, but busy Mr. and Mrs. Sedgewick are always neglecting her. In fact, Mr. Sedgewick is the only one who seems to try to play with her. Beethoven, meanwhile, runs after a loose hot dog cart, and ends up on a merry-go-round. Michelangelo has gotten loose and is now on the same merry-go-round. He is mistaken for Beethoven and taken home by Brennan and Sara. The real Beethoven is mistaken for Michelangelo, and grabbed by Simmons, the Sedgewick family butler and taken to their mansion.
Meanwhile, Sara is surprised when Michelangelo wipes his feet on the welcome mat and folds the napkins with his teeth at dinner. The Sedgewicks notice the change in "their dog" too, when he bolts Simmons to the ground to get a piece of turkey. Then, at night, Beethoven hears Madison whimpering because of a bad dream, and comforts her. At the next obedience class, Michelangelo leaves everyone in astonishment, by finishing the entire new obstacle course, while the sergeant is announcing about the course.
Meanwhile, Beethoven ruins a dinner party, when Nigel tries to kidnap him. A therapist points out to Mrs. Sedgewick that the reason "Michelangelo" is acting this way is because he is the first one exhibiting "symptoms". The therapist suggests that it may be because Mrs. Sedgewick doesn't care about anyone but herself. Meanwhile, Mr. Newton is concerned about "Beethoven", and starts acting out to get "Beethoven" to act out again too. He drinks toilet water, chases the mailman, etc. Michelangelo ends up catching on, and turns into a perfect clone of Beethoven.
Meanwhile, the Sedgewick family start playing fetch and swimming with Beethoven. But as the Sedgewicks and Beethoven are hiking, Nigel (who turns out to be Simmons' sidekick) kidnaps Beethoven and locks him in a warehouse, for a ransom of $250,000. But Beethoven breaks out and secretly switches places with Michelangelo at the obedience graduation. The real Michealangelo is found by the Sedgewicks, and Simmons and Nigel are put in jail. The real Beethoven is found by the Newtons, and he graduates. The Sedgewicks and Newtons then meet up at a fork on the road, though, they never find out about the switching of Beethoven and Michelangelo.