In Los Angeles, California, Mack Daddy O’Nasses (Ice-T) and Slug (Barima McKnight) discover a room full of gold, along with a leprechaun (Warwick Davis) that has been kept as a statue by a medallion on its neck. Mack Daddy takes a gold flute, but Slug removes the medallion freeing the Leprechaun and is killed, though Mack Daddy traps it once more. 20 years later, wannabe rap artists Postmaster P. (Anthony Montgomery), Stray Bullet (Rashaan Nall) and Butch (Red Grant) have their speaker destroyed while at an audition. After failing to sell a guitar to pawn shop owners Jackie Dee (Dan Martin) and Chow (Jack Ung), Stray Bullet manages to convince Mack Daddy, now a successful record producer, to pick them up. However, he drops them when Postmaster P. refuses to make his music more aggressive.
As revenge, the friends break into Mack Daddy's office and steal his magic golden flute, but accidentally frees the Leprechaun. The Leprechaun hunts the friends in order to recover his stolen flute, which places listeners of its tune in a euphoric trance. After killing Reverend Hanson, Jackie Dee & Chow, the DJ artists, and the transvestite Fontaine, the Leprechaun reaches the three friends at Postmaster P.'s home. When the boys and the Leprechaun engage in a fight for the flute, the Leprechaun forces Stray Bullet to point his gun at Butch's head threatening to kill him. Postmaster reluctantly complies but Stray Bullet foolishly charges the Leprechaun only to force him to shoot himself in the head while Postmaster P. and Butch watch in horror. Butch visits Postmaster P. at his grandma's house and convinces him to use a joint laced with four-leaf clovers to strip the Leprechaun of his powers in order to steal back the flute.
Postmaster P. and Butch, dressed in drag, then visit the club in which the Leprechaun has taken up residence. Postmaster P. then breaks the Leprechaun's spell on the Zombie Fly Girls by having them smoke one of the clover joints in order to find the Leprechaun. The duo then goes upstairs to find the Leprechaun who wants the dressed-up Postmaster P. to give him a blowjob. Before proceeding any further, the Leprechaun smokes the clover joint and passes out. The boys then take the flute and head downstairs only to be intercepted Mack Daddy who shoots Butch, killing him. Postmaster P. retaliates by shooting Mack Daddy three times. No longer under the effects of clover, the Leprechaun comes downstairs and uses magic to pin Postmaster P. against a girder. Postmaster P. then distracts the Leprechaun, allowing the bullet-ridden Mack Daddy to hit the Leprechaun with a wooden chair. Immediately, the Leprechaun uses magic to explode Mack Daddy's torso, but with the last of his strength, Mack Daddy throws the magic amulet in the air.
Cutting to a dark stage with much fog and a silhouetted Postmaster P. rapping about how he's finally made it. He moves to the forefront where his eyes are hidden behind sunglasses. He removes the sunglasses to show that his irises glow a neon green, which indicates that he is under the Leprechaun's spell. The Leprechaun is now a music manager, who took over the music world. The Leprechaun then tells the audience that he taught Postmaster P. everything he knows, before rapping about being an evil leprechaun.
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Mark Jones, Rob Spera, Alan Reynolds, Jon Huffman, Doug Hall, William Wells