The terrorist group ISIS takes notice when the boys are playing Ninjas. Meanwhile, Officer Barbrady is fired from his position for shooting a Latino-American kindergartner, and the PC citizens of South Park decide to get rid of their police department.
The episode begins with all police officers in range of South Park Elementary being called in for a "Code Red". Officer Barbrady shows up and is instructed go in around back. The officers tactfully breach the gymnasium, only to find that the call was made by PC Principal to remove Leslie Meyers because she was talking with her friend (although she wasn't). Barbrady bursts in and becomes confused when PC Principal shines a laser pointer on him, causing him to accidentally shoot a Latino-American child in the right shoulder.
Mayor McDaniels and the City Council fire Barbrady for his actions (even though he was given a lack of information on the raid). He tries to say he is sorry, in vain, to convince them otherwise; stating that he used to be the only police officer in town, and that policing is all he knows. McDaniels, however, coldly and bluntly tells him that he does not belong in any other town as progressive as South Park and is told to go away.
At SoDoSoPa, there are dozens of homeless people taking refuge in the dilapidated structures. When Karen is scared by the Homeless people's threats, Kenny's dad tries to call the police for help, but the police don't want to get involved for fear of being fired for beating up minorities, which turns out to be the only reason any of the policeman joined the force. The officers suggest turning the Park County Police Force into a Hula School. This prompts Kenny to do something about it.
Barbrady returns to his apartment, and it turns out he only got a job as a policeman to pay to care for his dog, Barney. He says he will find a way to make it better, as he "loves to help" and "loves to be needed".
Stan and Kyle are playing basketball when Cartman and Butters come up to them and tell them that Kenny and Token are gay. Upon elaborating, Cartman says that they have built a Ninja fort and are dressed like ninjas to scare away people. When they arrive, it is shown that they, along with Clyde and David, have made a SoDoSoPa Ninjas. Cartman still finds this gay, until a couple pulls up and is scared away upon seeing the ninjas while stereotypical Middle-Eastern music plays in the background. This changes his tune.
At Skeeter's Bar, the patrons gang up on a police officer, and force him to leave after questioning him on his knowledge of "Farm-To-Table". They rejoice, and Randy says that they've "Only had a Whole Foods Market for only a month" and that they "already don't need cops".
Stan, Kyle, Cartman, and Butters join the SoDoSoPa Ninjas and are instructed on the "Warrior Code", and they begin training. Cartman already jumps on Kyle and says that he shouldn't be a Ninja since he called them gay (he is simply trying to make it seem like it wasn't him), but since they are all wearing ninja outfits Cartman can't tell anyone apart and he tells this to Kyle. After Kyle identifies himself, Cartman tries to act like he's Butters. Butters walks up and asks if Cartman wants to spar with him. Cartman agrees, kicks Butters in the nuts, and walks off. More homeless people arrive at SoDoSoPa, but are scared off when they see the ninjas.
The citizens of South Park hold a protest outside the Police Department, in an "effort" to create a dialogue between the citizens and the police officers. This turns out to be just a bunch of people outside the building drinking and flipping off the police officers while "Fuck tha Police" plays. A montage then plays showing the citizens being rude and disrespectful to the police, doing things like pushing carts into them, spray-painting their squad cars, and flashing them. Barbrady tries to get a job at McDonald's, but is thrown out as he is still seen as a cop. Since Barbrady is unable to pay rent he is evicted from his apartment, thus making him homeless. The montage ends with Randy going to shop at Whole Foods, only to find all of the homeless people sleeping outside.
People believe that the SoDoSoPa ninjas are actually part of ISIS, and they interview the boys on why they joined. Cartman uses this to continue to try and make it seem that he didn't say that playing Ninjas were gay, but nobody believes him. He then points to Kyle and calls him a "lying, backstabbing Jew", but he still doesn't know who is who and he actually points to Stan.
After Barbrady is evicted from his apartment for being a (former) police officer, he joins the homeless in Shi Tpa Town, along with his dog. Stephen Stotch tells Randy and others that it is because of ISIS, and that a group of troubled kids have taken residence in SoDoSoPa and forced all the homeless out. He goes on to say that the kids are "rotten on the inside" and "probably have shitty parents". Jimmy has also joined the SoDoSoPa ninjas, and his parents sit him down to ask him why he joined (they also believe the ninjas are a part of ISIS). Jimmy tells them that it is fun, and that they believe in "something bigger than themselves", and that by following their "Warrior Code" their beliefs and faiths will lead to a greater path, the "Path of the Warrior". This causes Jimmy's parents to freak out and run off.
Randy, Gerald, Stephen, Mayor McDaniels, and a few others go to the Police HQ and try to get them to help with ISIS. To their astonishment, the Police Department has converted into a Hula School, and say that they are too busy to help get rid of ISIS.
At SoDoSoPa, Cartman tries to make Butters believe that he wasn't the one who said that being ninjas were gay. Token calls everyone together to tell them that "Actual ninjas" want to talk to them. The "Actual ninjas" turn out to be a member of ISIS. Cartman asks the man if having a Jew be a ninja is at all problematic, to which the man replies with "extremely". Cartman then dances to "U Can't Touch This" and tells them that he "told" them.
With nobody else to turn to, the town gets Barbrady to be a policeman again and tells him he needs to shoot some kids. He is told that some of the kids are minorities, but it is different this time (they justify shooting the kids because they believe they are bad kids and terrorists).
Cartman has kidnapped Kyle and brought him to the ninja clubhouse to tell everyone that it was Kyle who said that being ninjas was gay, and that he had brainwashed Butters and Stan into believing it was Cartman. He shows a picture that Kyle supposedly drew of two ninjas having sex. Running with the theme that Cartman can't tell anybody apart, he mistakenly kidnapped Clyde. After realizing his mistake, he tries to pass himself off as Token, citing his actions on "black rage".
At dinner, Randy realizes that Stan isn't actually part of ISIS, but rather playing Ninja (which he also calls gay). He runs off to save him.
The boys have tied up Cartman, and vote to kick him out of the SoDoSoPa Ninjas. Barbrady shows up, and tells them that he doesn't want to shoot them, and that he understands their anger at the town. Randy bursts in and knocks Barbrady to the ground, causing Barbrady to accidentally shoot David in the right shoulder.
The City Council fires Barbrady again, this time for pulling out his gun when the boys were innocently playing Ninja Warriors, even though it wasn't his fault. They selfishly take no responsibility for what they did wrong, and deny telling him to go shoot the kids. They use the "Farm-To-Table" technique on him again, and he gives back his sunglasses once again.
The police department finally gets rid of the homeless people in Shi Tpa Town, with the agreement that nobody will watch when they beat up minorities, despite several policeman seen beating up the minorities.
The episode ends with Barbrady in a room, and a man walks in. The man asks him if he has noticed any changes in South Park. He continues to tell Barbrady that these changes are all part of a plot to take down the town. He pulls out a photo and asks Barbrady if he knows anything about Leslie, and shows him the photo of PC Principal pushing Leslie on a swing.
AV Club gave "Naughty Ninjas" a "B+" rating saying: "The answer ended up being no (thank God), with Trey Parker and Matt Stone delivering a relatively even-keeled half-hour, at least politically speaking. As it turns out, “Naughty Ninjas” has less to do with institutionalized racism (not in a direct sense anyway) and more to do with people only being compassionate when it suits them. That is to say, they’re not actually compassionate at all, which is a theme the show has been exploring all season: this idea of trendy progressivism."
IGN gave "Naughty Ninjas" a "8.0" rating saying: "This week's South Park was out for blood on its former self, as the townspeople shunned Officer Barbrady -- one of the last remaining side-characters from the show's early days. In addition to offering a bittersweet look at the lowly cop, "Naughty Ninjas" also featured a nostalgic ninja storyline for the boys, who were humorously mistaken for ISIS agents in Sodo Sopa. Really, the only thing that didn't land was the police brutality subplot, which felt a bit more contrived than the others."