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In her suburban home in Albuquerque, NM, seven-year-old Olive Hoover watches videotapes of the Miss America pageant with rapt fascination. Olive, who is bright and sweet-natured but not conventionally pretty, studies and imitates the winner's ecstatic reaction. Meanwhile, in a classroom, her father Richard, an aspiring motivational speaker, presents his nine-step "Refuse to Lose" program to a tiny audience. Elsewhere in the Hoover home, Olive's teenage half-brother Dwayne exercises in his room beneath a hand-painted poster of German philosopher Friedrich Nietzsche, while Grandpa Edwin snorts heroin in the bathroom. Sheryl, Olive's mother, goes to the hospital where her brother Frank is recovering from a recent suicide attempt. The depressed Frank is released into Sheryl's care, and she takes him home and installs him in Dwayne's room. As the family sits down to a fast-food dinner, Frank learns that the sullen Dwayne has not uttered a word for the past nine months and plans to maintain his vow of silence until he achieves his goal of entering the Air Force Academy to become a test pilot. Olive, who has been practicing her beauty pageant routine with Grandpa, notices the bandages on Frank's wrists and asks him what happened. Despite Richard's disapproval and Grandpa's homophobia, Frank, a college professor and the most highly regarded Proust scholar in the country, reluctantly reveals that he fell in love with one of his male graduate students, who did not return his affection. To make matters worse, the young man instead fell in love with Frank's academic rival, Larry Sugarman, leading Frank to behave irrationally and lose his job. The final blow came two days earlier, when Sugarman was awarded the MacArthur Foundation "genius" grant; upon hearing the news, Frank tried to kill himself. In the uncomfortable silence that ensues, Olive tells Frank that she entered a beauty pageant while visiting her Aunt Cindy in California over spring break and came in second. A phone message from Cindy reveals that the girl who had come in first was disqualified for using diet pills, meaning that Olive is eligible to enter the Little Miss Sunshine contest, which will be held in Redondo Beach, CA, that Sunday. The Hoovers, who are on a tight budget while Richard tries to launch his self-help career, cannot afford to fly to California. Because their two cars are too small to transport the entire family, they set out the next morning in Richard's old, bright-yellow Volkswagen bus. Between Richard's uneasy relationship with his father, Sheryl's fear about the family finances and Dwayne's brooding, only Olive is excited about the trip. After several hours on the road, Sheryl insists on doing some of the driving, but her attempt to learn how to drive a stick shift destroys the clutch. The bus cannot be fixed in time, but a roadside mechanic points out that the clutch is only needed to go from first to second gear, so the bus should be fine for freeway driving if they can start it in third gear. The family develops a system of pushing the bus until Richard can put it in gear, then running alongside and jumping into the moving vehicle. During this process, Frank begins to feel cheerful for the first time in months. Later, at a gas station, Richard calls promoter Stan Grossman, who is trying to get Richard a book deal for his self-help program. Grandpa gives Frank money to buy him some dirty magazines from the convenience store. While Frank is waiting for a slushie, he is mortified to run into Josh, the object of his unrequited love, who is on a vacation with Sugarman. Richard's call to Stan ends with the financially devastating news that the book deal has failed to materialize, and he and Sheryl bicker furiously. With genuine sympathy, Grandpa tells Richard he is proud of him for taking a chance, and the men awkwardly share a tender moment. The family stops for the night at a motel in Arizona. In the room she shares with her grandfather, Olive tearfully admits she is afraid of losing the contest because her father hates losers. Grandpa, who despite his coarse manner is devoted to Olive, reassures the little girl that she is beautiful inside and out. After a terrible fight with Sheryl, Richard pays a teenage boy to borrow his scooter and drives to Scottsdale, where Stan is attending a convention. Richard confronts Stan, who says there was no interest in Richard's program and never will be because Richard is unknown. Early the next morning, Olive goes into her parents' motel room and tells them that Grandpa will not wake up. At the hospital, the family is told that Grandpa died in his sleep. The hospital will not allow Richard to put off the burial until after the pageant, so Richard devises a desperate scheme to get Olive to the contest on time. Wrapping Grandpa's body in a sheet, Richard and Sheryl lower the corpse out the window to Dwayne and Frank, who put it in the trunk of the bus. On the freeway, Richard honks at a car that cuts them off, and the horn gets stuck. They are soon pulled over by a policeman, and Frank's nervous behavior causes the policeman to open the trunk. When Grandpa's dirty magazines fall out, the policeman is so favorably impressed that he does not even notice the body and lets the family go. As they approach Redondo Beach, with the horn bleating constantly, Olive entertains herself by giving Dwayne the eye test she picked up at the hospital. Dwayne fails the test for color-blindness, and when Frank tells him this means he cannot be a pilot, he flies into a rage. Richard pulls the van over and Dwayne runs out, screaming in frustration, and refuses to get back on the bus until Olive goes to her brother and silently puts her arm around him. The family finally reaches the hotel where the contest is being held, but Ms. Jenkins, the pageant official, turns them away because they are five minutes late. Richard drops to his knees and pleads with her, and a sympathetic associate registers Olive himself. Sheryl takes Olive backstage, where many of the other young contestants are undergoing elaborate beauty rituals, and Richard calls a funeral parlor to pick up Grandpa's body. Sitting in the lobby with Dwayne, Frank looks through a newspaper and comes across a full-page ad for Sugarman's best-selling book on Proust. Later, Frank and Dwayne walk to a pier and converse about the meaning of life, after which Dwayne declares that he does not need the Military Academy to teach him how to fly and that nothing can stop him from doing what he loves. The contest begins, and Richard watches the heavily made-up little girls perform their polished routines with some discomfort. At the end of the talent competition, Olive takes the stage, and after dedicating her performance to her grandfather, proceeds to do a racy dance routine to the song "Super Freak." Many in the audience are offended and walk out, but when the pageant emcee tries to pull Olive off stage, Richard runs up and stops him. Oblivious to the mayhem around her, Olive continues to dance with innocent abandon, and Richard and the rest of the family start to dance with her. Afterwards, the family is detained while Ms. Jenkins confers with the police. The policeman tells them they are free to go as long as they agree never to enter another beauty pageant in California. The family happily push-starts the honking bus and begins the trip back home.