In Las Vegas, someone with missing body parts sells the statue of a leprechaun to pawn shop owner, Gupta.

As Gupta examines a pot of gold coins found with the statue, the leprechaun, Lubdan, comes to life and attacks him.

Gupta sees a computer program on Irish folklore which says that a leprechaun's coin will grant the holder one wish, and that their power resides in the gold.

Meanwhile, Scott McCoy, a college student passing through Vegas, helps a stranded motorist, Tammy, get to her job at the Lucky Shamrock Casino, as her Volkswagen Bug has broken down.

On the advice of casino employee Loretta, Scott goes to the pawn shop to sell his watch and finds Gupta's corpse and the missing coin.

Wanting to stop anymore financial losses, the casino owner, Mitch, closes the table and gives Scott a free room at the hotel.

After Tammy leaves the suite, Lubdan appears and tricks Mitch into watching a woman undress on the TV.

Scott begins showing traits of a leprechaun, with random cravings for potatoes and speaking with an Irish accent.

Lubdan then causes Loretta to grow exponentially, to the point of explosion, by magically inflating her breasts, lips and buttocks.

Thinking it is a part of the show, the audience watches as Lubdan uses a chainsaw to cut Fazio's box in half.

[2] After optioning a spec script of his own to Blue Rider Productions, screenwriter David DuBos was given an opportunity to pitch for Leprechaun 3.

[10] Actor Warwick Davis would later claim the film as his favorite of the series: "I think it tapped into the potential of bringing a comedic element to it all.