Miley Stewart (Miley Cyrus) has become overwhelmed with her alter-ego, Hannah Montana's, popularity. After being late at her blowout concert and filming her music video ("Best of Both Worlds 2009 Movie Mix"), Oswald (Peter Gunn), a sneaky undercover journalist for celeb magazine BomChic, overhears that Miley's keeping a secret (that she is Hannah Montana) and becomes determined to find out what it is.

However, Miley gets into trouble when she ends up in a catfight with Tyra Banks over a pair of shoes at a department store, wanting to buy them as a birthday present for best friend Lilly, but Tyra is presenting it to her friend. This results in her missing saying goodbye to brother Jackson (Jason Earles) who departs for college. When Oswald secretly follows her limo to the party, she is forced to attend as Hannah, resulting in the guests turning their attention to her instead of Lilly (Emily Osment), especially when Hannah is accompanied by Steve Rushton in her performance of ("Let's Get Crazy").[12][13] Oliver Oken (Mitchel Musso) and Rico (Moises Arias) try to stop Lilly from leaving, but the party is ruined, due to the cake exploding.

Hannah and Tyra's fight is splashed across front pages across the media and Miley's father, Robby (Billy Ray Cyrus) is left furious about the fact her popstar life could threaten to take over for good. That same day, they leave for the World Music Awards in New York on a private jet but when the plane lands, Miley instead finds herself in Crowley Corners, Tennessee, her hometown. It soon emerges Robby had the plane travel to Tennessee instead because of it being her grandmother, Ruby's (Margo Martindale) birthday and that he wants her to reveal the life she could have had. When the dismayed Miley asks if her career as Hannah Montana is over, Robby says to ask again in two weeks' time. But Miley won't let go being Hannah Montana.

In Tennessee, Robby and Miley have their own relationships. Robby has a love interest, Lorelei, played by Melora Hardin, and Miley develops a deep connection with a childhood friend Travis Brody (Lucas Till), after he helps her with riding her old horse, Blue Jeans. Robby's relationship with Lorelei is awkward.

That night, Miley looks at a picture of her mom and her when she is young, missing her mother. Meanwhile, Miley is chastened after Ruby mentions that she seems to want to be Hannah Montana more than she wants to be with her family. Oswald, meanwhile, follows Miley to her hometown. Later, she tries to write a song, but when Travis ignores it, she is unable to write. Meanwhile, there is a firm battle developing with the residents of Crowley Corners and a team of developers who are planning to destroy the meadows and building a shopping mall on the site. At a barn party that night, several singers contribute to the charity to save Crowley Corners, singing ("Back to Tennessee"), and ("Crazier"), (Taylor Swift). Miley then sings ("Hoedown Throwdown") until the mall developers arrive. Travis and Miley dance, as do Robby and Lorelei, and the pair share their first kiss. Travis suggests that Hannah Montana should appear to play a special gig, seeing that Miley knows her (Miley had lied to Travis that she saved Hannah's life in a surfing accident)....