Luther Krank and Nora Krank are sick of the Christmas season. They are sick of the frenzy of the season and sick of all the extra work involved with the holiday. They become disillusioned with Christmas after taking their daughter, Blair, to the airport in late November so that she could go on a year-long assignment for the Peace Corps in Peru.
Knowing that their daughter will not be with them during Christmas for the first time, Nora and Luther become uninterested in typical Christmas traditions (and Christmas itself). The two were also dismayed by how much money they had spent on gifts, decorations, and entertainment and how they had very little, if anything, to show for it. In a spur-of-the-moment decision, Luther decides that he and Nora will skip the Christmas season altogether and go on a cruise to the Caribbean together.
Luther broaches the idea of going on a cruise with Nora, who is at first skeptical of the idea. After thinking about it some more, however, Nora decides that she will go on the cruise with one condition: that they will donate money to their church and local children's hospital. Luther initially refuses but eventually agrees to the idea after Nora tells him that she will not go on the cruise with him unless they donate the money.
Every year, the couple decorated their house extensively and put on an elaborate Christmas Eve party. Although Nora typically had a lot of fun putting the party on and decorating, she quickly adjusts to not doing any work for Christmas. But her neighbors do not. Their neighbors were upset because the Kranks' decision not to decorate jeopardized their block's chances to win the competition for the best-decorated block. To show their displeasure with the Kranks' decision, the people on the block harass the Kranks so that they will change their minds.
But Luther and Nora aren't ready to roll over to their neighbors. Luther, for example, does a number of things to get back at his neighbors, including freezing the sidewalk the people on the block were using to be obnoxious. The rest of the town joins in on the pestering of the couple, who are eagerly awaiting their departure on their cruise.
A wrench, however, is thrown into the couple's plan when their daughter calls them and lets them know that she is coming home with her Peruvian fiancée for Christmas. Their daughter is eager to introduce her fiancée to her family's various traditions, including their traditional Christmas Eve party, which Nora tells her that they will be putting on this year.
With nothing planned and no decorations put up, Nora and Luther scramble to prepare their house for the arrival of their daughter. Additional chaos ensues, and Nora and Luther come up with unique solutions to their Christmas problems. Their daughter arrives, but Luther is injured and is unable to pick her and her fiancée up from the airport. The town, who had previously hated the Kranks, band together and pick up the Kranks' daughter and go to the party.
After that, the true meaning of Christmas is revealed to the Kranks. They give their cruise tickets to another couple, who eagerly accept the gift. Nora and Luther then willingly, and happily, celebrate Christmas together as a family.
