The game revolves around another one of Plankton's evil schemes to obtain the Krabby Patty secret formula. In his attempt to do so, Plankton hires an army of sea ants to assist Robot Krabs in order to retrieve the Krabby Patties in the robot, only to realize he made a fatal error that now has it going on a rampage. Can SpongeBob save the day even after thinking he is the cause of the mess? Plankton has hidden Gary and in order for SpongeBob to find him, he must complete missions hosted by Plankton, but it is really a trick to get the Krabby Patty secret formula.
This game has two different storylines. Both have the same levels, albeit in slightly different orders, but the plot details are different between the two of them.
In the Wrong Side storyline, Plankton captures Gary and SpongeBob has to fulfill all of Plankton's demands to get his beloved pet back! SpongeBob wakes up and searches for Gary all over his room until he eventually finds a tape recorder in Gary's food bowl. Plankton tells SpongeBob that he has hidden Gary and that SpongeBob will have to complete a bunch of random missions in order to find out where Gary is. The first mission for SpongeBob is to earn his learner's permit.
As SpongeBob heads out, Plankton tries to make the recorder self-destruct for dramatic effect, but the detonator doesn't work. SpongeBob gets his learner's permit from Mrs. Puff and returns home to find a second recorder. This time, Plankton tells SpongeBob to go get some jellyfish jelly. SpongeBob asks Patrick for help, and they go to Jellyfish Fields together. After collecting the jelly, SpongeBob goes looking for the next recorder but can't find it. Patrick then remembers that he had found the recorder when they first arrived at Jellyfish Fields, and he had eaten it. Annoyed, SpongeBob presses on Patrick's belly to make the recorder play its message, wherein Plankton demands Krabby Patties from SpongeBob.
SpongeBob storms off to the Krusty Krab and Patrick burps out the recorder just as the self-destruct sequence begins. To Plankton's frustration, the counter goes up instead of down. While SpongeBob collects the Krabby Patties, Plankton instructs his army of sea ants on what to do with the Krabby Patties, but they are confused and bring the patties to SpongeBob's house instead of the Chum Bucket.
A delivery man gives SpongeBob the next recorder, which instructs SpongeBob to get cheese, so he goes to the Fish Hooks Park. Plankton tries once again to detonate the recorder, but the tape runs out just before the timer runs out, preventing it from exploding. At the "carnival," SpongeBob finds Squidward, who's trying to do an interpretive dance. SpongeBob asks Squidward to help him collect cheese; Squidward refuses, but SpongeBob forces him to help anyway. After they're done, Squidward retaliates by playing a prank on SpongeBob that scares him. In the meantime, Plankton commands the sea ants to bring all the Krabby Patties from SpongeBob's house to the Chum Bucket, but the sea ants misunderstand Plankton's orders again and bring everything to the Chum Bucket...including the next recorder.
So Plankton sends SpongeBob a new recorder, which tells SpongeBob that he must pay Plankton $100 to get Gary back. SpongeBob knows he does not have that kind of money, so he turns to Mr. Krabs for help. After defending his ship from the Flying Dutchman, Mr. Krabs lets SpongeBob borrow $100. SpongeBob goes to the Chum Bucket with the money in hand, only to find that Gary escaped by himself, so the two celebrate and go home happy. At the same time, the sea ants finally reach the Chum Bucket with all of SpongeBob's stuff. As he counts the Krabby Patties, Plankton hears his voice somewhere else, counting down. He looks around and notices the recorder that the sea ants took from SpongeBob's house, which is about to self-destruct. Plankton orders everyone to evacuate, and the Chum Bucket explodes.
Plankton hires red sea ants to capture Krabby Patties using a Robot Krabs. Plankton explains his plan to the sea ants, then sends them and Robo-Krabs to the Krusty Krab, where they are easily able to steal the Krabby Patties because Squidward's the only one there and he is asleep. But when the sea ants try to go back to the Chum Bucket, Robo-Krabs malfunctions and they lose control of him! SpongeBob shows up and notices Robo-Krabs in the distance, quickly realizing that he has to warn Mr. Krabs. Squidward tells SpongeBob that Mr. Krabs is miles away on a treasure hunt. SpongeBob gets the idea to drive to Mr. Krabs, but Squidward reminds him that he does not have a license, so SpongeBob goes and gets a learner's permit from Mrs. Puff.
He then runs into Patrick and shows him his learner's permit. Patrick laughs at the embarrassing picture on the license, and SpongeBob gets angry. He starts to berate Patrick, but then the wind blows the license away. The two friends try to catch the license, but it gets eaten by a clam, who them spits the chewed-up license onto Patrick's head. Patrick gets scared and starts running frantically, but then runs into the "carnival" and invites SpongeBob to play on the hooks with him. As they ride the hooks, SpongeBob notices Robo-Krabs on one of the hooks and remembers that he was supposed to find Mr. Krabs. SpongeBob hitches a ride on a jellyfish, only for it to drop him off at Jellyfish Fields.
He meets Sandy, who asks him to be her jellyfishing partner. As they go around catching jellyfish, Sandy complains that her bulky suit makes it hard for her to catch jellyfish. SpongeBob suggests that Sandy use her pop gun to catch the jellyfish, and offers to lure the jellies towards her. After the duo is finished, SpongeBob remembers again that he needs to find Mr. Krabs, so he rides another jellyfish.
This one brings SpongeBob straight to the real Mr. Krabs on his pirate ship. Mr. Krabs tells SpongeBob that the Flying Dutchman is approaching and plans on stealing Krabs's riches, so SpongeBob uses the ship's cannons to fend off the Flying Dutchman.
Afterward, Mr. Krabs congratulates SpongeBob on a job well done. SpongeBob warns Mr. Krabs about Robo-Krabs, just as the mechanical menace appears. Mr. Krabs isn't fazed; he simply laughs and cracks a few jokes about Plankton's latest "college-educated plan." This angers Plankton, who is watching the chaos unfold, and he orders the sea ants to activate Robo-Krabs's weaponry. But they accidentally hit the self-destruct button instead, so the ants try to rescue the Krabby Patties and escape Robo-Krabs, but the explosion destroys all the patties. Plankton swears revenge.
In the PC game Employee of the Month, there is a poster of this game's cover art, which is named "America's Favorite Sponge." If one clicks on the poster, SpongeBob breaks the fourth wall and says, "Ooh, Operation Krabby Patty! That was my very first game...good times, good times."
Technically, this is not true because Legend of the Lost Spatula was the first SpongeBob game to be released, and in Europe, SuperSponge also came out before-hand. However, Operation Krabby Patty was the first SpongeBob PC game.
Mermaid Man and Barnacle Boy make a cameo in the video game part Boating School #101 and have a picture signed with an autograph.
The wrong side has several typos, such as "Min Menu" instead of "Main Menu."
The fourth wall is broken when Plankton politely asks the artist to put the elevator in the correct location after Robo-Krabs crashes into a wall, after which a paintbrush draws a new elevator door in the right spot to allow Robo-Krabs to enter the room.
Jellyfish, wrong stoplight checkings, hooks with no cheese, the Flying Dutchman's green fireballs, and electrical eels give the player a time penalty.
The mail delivery service FedOh is a parody of FedEx.
The red sea ants Plankton hires resemble big-brain sized aliens from American films like Mars Attacks!
In the Wrong Side intro to Boating School 101, Plankton tells SpongeBob that if he successfully completes a mission for a clue as to Gary's whereabouts, he says that SpongeBob will gain immunity and cannot be voted off. This is a reference to the hit reality TV series Survivor.