With their daughter, Blair (JULIE GONZALO), headed off to Peru with the Peace Corps, Chicago suburbanites Luther (TIM ALLEN) and Nora Krank (JAMIE LEE CURTIS) now find themselves empty-nesters for the first time since she was born. Ever the pragmatist, Luther thinks that he and Nora could enjoy their newfound freedom and save money over their normal holiday expenditures by forgoing Christmas and taking a Caribbean cruise instead.
Since Luther insists that include a boycott of all things Christmas related -- such as decorating their home -- their festive neighbors don't understand and thus go on the offensive. While Walt Scheel (M. EMMETT WALSH) -- whose wife, Bev (ELIZABETH FRANZ) -- has had her cancer return -- steps up his normal antagonism toward Luther, unofficial street leader Vic Frohmeyer (DAN AYKROYD) and his young son, Spike (ERIK PER SULLIVAN), put the pressure on him to at least put out their huge, plastic snowman like everyone else.
Luther is adamant in his refusal to follow tradition, much to the dismay of Nora as well as local cops Salino (CHEECH MARIN) and Treen (JAKE BUSEY) who were hoping for some holiday charitable contributions from him. When Blair calls about her unexpected return home with Peruvian boyfriend Enrique DeCardenal (REN LAVAN), however, the Kranks go into frantic, high-speed mode to get their house in proper holiday condition for them.