Sue Charlton, a feature writer for Newsday engaged to marry her editor, Richard, travels to Walkabout Creek, a small hamlet in the Northern Territory of Australia to meet Michael J. "Crocodile" Dundee, a bushman reported to have lost a leg to a Saltwater Crocodile. On arrival, she finds his leg is not missing, but he has a large scar.
At first Sue finds Dundee less legendary than she had been led to believe, being unimpressed by his uncouth behaviour and clumsy advances towards her; however, she is later amazed when in the Outback, she witnesses "Mick" (as Dundee is called) subduing a Wild Asian Water Buffalo, taking part in an Aboriginal tribal dance ceremony, killing snakes with his hands, and (at her request) scaring tourists from their sport of shooting kangaroos. Offended by Mick's assertion that she is incapable of surviving the Outback alone, Sue goes out alone to prove him wrong, but is attacked by a crocodile and rescued by Mick. She finds herself becoming attracted to him.
Sue invites Mick to return with her to New York City on the pretext of continuing the feature story. There he is perplexed by New York behaviour and customs but is still able to overcome problematic situations including attempted robberies and two encounters with a pimp. When Richard proposes marriage to Sue at a dinner party, Mick is upset and decides to go 'walkabout' around the USA; but Sue, having refused Richard, follows him to a subway station. There, she cannot reach him through the crowd on the platform, but has members of the crowd relay her message to him, whereupon he walks to her on the heads and raised hands of the jubilant crowd and embraces her.