At the start of the film, Mushu does not make his official appearance until after Mulan runs away from home to serve in her elderly father Fa Zhou's place in a war against the deadly Hun army. Knowing that Mulan's exposure will lead to the disgrace of the Fa family, the spirits of the ancestors choose to send the Great Stone Dragon to simply bring her back safely. For the task of awakening him, they send Mushu, who is offended when he is not asked to find her himself. In the past, his actions in protecting the Fa family led to disaster.
After several unsuccessful attempts at waking the Dragon, he ends up accidentally destroying the dragon statue. Cri-Kee suggests that Mushu bring Mulan back safe instead so that he won't be punished, but Mushu decides to make his own plan and sets out to make Mulan a war hero, selfishly endangering her life. He meets her in a bamboo thicket overlooking the army camp. He poses as her powerful guardian though she is mildly impressed because of his small stature.
They make their way for the camp where Mushu continuously gives Mulan (in the guise of Ping) advice on acting masculine. The advice eventually leads to a brawl which causes Mulan to become the most unpopular soldier at the camp. For the next couple of days, Mulan progresses along with the others in skills, but theEmperor's adviser Chi-Fu feels the troops are still unqualified for the war. To keep his plan intact, Mushu creates a phony message alerting Captain Li Shang and the troops to head to the front immediately.
Following a run-in with the Huns after he accidentally fired a cannon causing Li Shang and his troop's position to be given away to Shan Yu and the Huns, and Mulan being injured by Shan Yu, Mulan's secret is discovered, and she is left on a mountain summit as punishment. Mushu then takes the time to reveal the real reason he decided to help Mulan on her mission, but apologizes and promises to stay by her side no matter what. Just then, Mulan spots Shan Yu, the leader of the Huns, making way for the city. Mulan, Mushu, Cri-Kee and Khan make way to the city to warn Shang. At the Emperor's palace, Mulan battles Shan Yu and comes up with a plan. She leads him onto the roof, where Mushu fires a rocket at the villain. Shan Yu is then blasted to the New Year's fireworks tower, and is killed in the explosion. Mulan is deemed China's bravest warrior, and Mushu regains his job.
- He is voiced by Eddie Murphy in his debut.