The story is loosely based on Ghost in the Shell manga chapter "Robot Rondo" (with elements of "Phantom Fund"). Opening in 2032, Public Security Section 9 cybernetic operative Batou is teamed with Togusa, an agent with very few cybernetic upgrades, following the events of Ghost in the Shell.
In 2029, the world is interconnected by a vast electronic network that permeates every aspect of life. Much of humanity has access to this network through cybernetic bodies, or "shells", which possess their consciousness and can give them superhuman abilities.
The film tells the story of a virtual reality game designer, Jimi (Christopher Lambert), who discovers that the main character of his game, Solo (Diego Abatantuono), has achieved sentience due to an attack by a computer virus. Asked by his creation (who feels everything the character in the game feels, including multiple deaths) to eliminate its existence, Jimi sets out to erase the game from the server of his employer, Okasama Star, before it's commercially released on Christmas Day, and thus spare Solo further suffering.
The opening titles set the film in "North America – 1991." Armando (Ricardo Montalbán) explains that in 1983 (ten years after the end of Escape from the Planet of the Apes, which was set two years ahead of its theatrical release date), a disease killed the world's cats and dogs, leaving humans with no pets. To replace them, humans began keeping apes as household pets. Realizing the apes' capacity to learn and adapt, humans train them to perform household tasks. By 1991, American culture is based on ape slave labor (just as Cornelius described would happen in the previous film). It is also suggested that the North America of the 1990s is at least partly a police state, as apes and humans are being watched at all times.
Told as a flashback to the early 21st century with a wraparound sequence narrated by the orangutan Lawgiver (John Huston) in "North America - 2670 A.D.", this sequel follows the ape leader, Caesar (Roddy McDowall), years after a global nuclear war has destroyed civilization. In this post-nuclear society, Caesar tries to cultivate peace between the apes and the surviving humans. A gorilla general named Aldo (Claude Akins), however, opposes this and plots Caesar's downfall. Caesar is married to Lisa (Natalie Trundy), the female ape of the previous film, and they have a son, named Cornelius (Bobby Porter) in honor of Caesar's father.
In an alternate universe, people are addicted to an illegal simulation video game called Avalon. Despite its popularity, the game can leave a player catatonic. One player in the game, Ash (Małgorzata Foremniak), is a very skilled warrior that plays solo in her missions. After completing one of her missions, Ash cashes in her winnings for ammo and currency, whereas the Game Master (Władysław Kowalski) tells her that playing alone is more dangerous on the next level, and he wants her to consider joining a party. Ash witnesses her own performance on the battle screen in the lobby while waiting for her money from the receptionist (Katarzyna Bargielowska).
In the last two days of 1999, Los Angeles has become a dangerous war zone. As a group of criminals rob a Chinese restaurant, the event is recorded by a robber wearing a 'SQUID', or "Superconducting Quantum Interference Device", an illegal electronic device which records events directly from the wearer's cerebral cortex, and when played back through a MiniDisc-like device called a "deck", allow a user to experience the recorder's memories and physical sensations. Lenny Nero is a former LAPD officer turned black marketeer who deals in bootleg SQUID recordings. His main supplier, Tick (Richard Edson), tries to sell the robbery clip to him. Lenny eventually agrees to buy it at a reduced price, having to cut out the last part where the rig records the robber's death by falling; clips that record the wearer's death are known as "blackjack" (snuff) clips, because the experience is described as "jacking into the big black" by Tick.
Jack Harrison (Goldblum) and Gil Turner (Begley) are writers for The Sensation, a supermarket-grade tabloid run by Turner's father, Mac (Norman Fell). Jack is a more serious journalist using The Sensation as a stepping stone to a better career, while Gil is a gangling yes-man ever ready to win his father's approval.
Baron von Frankenstein neglects his duties towards his wife/sister Katrin, as he is obsessed with creating a perfect Serbian race to obey his commands, beginning by assembling a perfect male and female from parts of corpses. The doctor's sublimation of his sexual urges by his powerful urge for domination is shown when he utilizes the surgical wounds of his female creation to satisfy his lust. He is dissatisfied with the inadequate reproductive urges of his current male creation, and seeks a head donor with a greater libido; he also repeatedly exhibits an intense interest that the creature's "nasum" (nose) have a correctly Serbian shape.
A nomad scavenger treks through an irradiated wasteland and discovers a buried robot. He collects the pieces and takes them to junk dealer Alvy, who is talking with 'Hard Mo' Baxter, a former soldier, and Mo's friend Shades. When Alvy steps away, Mo buys the robot parts from the nomad and sells all but the head to Alvy. Intrigued by the technology, Alvy begins to research its background. Mo and Shades visit Jill, Mo's reclusive girlfriend, and, after an initially distant welcome where Jill checks them with a Geiger counter, Mo presents the robot head as a Christmas gift. Jill, a metal sculptor, eagerly accepts the head. After Shades leaves, Mo and Jill argue about a government sterilization plan and the morality of having children. Later, they have sex, while being unknowingly watched by their foul-mouthed, perverted, voyeuristic neighbor Lincoln Weinberg via telescope.
In the film's backstory, human civilizations built flying cities, which were later destroyed by an unspecified catastrophe, forcing the survivors to live on the ground. The only remaining flying city, Laputa, still floats in the sky, concealed by a permanent powerful thunderstorm that surrounds it.
A serial killer, named Karl Hochman (Ted Marcoux), is known as "The Address Book Killer" due to his habit of stealing address books and choosing his victims from them. While he is working at a computer store, he obtains Terry Munroe's (Karen Allen) address book after another employee, who is demonstrating a scanner, copies a page of her address book into the computer. While heading home that evening, Karl is nearly killed by a collision with a truck.
Lawrence Talbot (Lon Chaney, Jr.) is making an urgent call from London to a Florida railway station where Chick Young (Bud Abbott) and Wilbur Grey (Lou Costello) work as baggage clerks. Wilbur answers the phone and Talbot tries to impart to him the danger of a shipment due to arrive for the "McDougal House Of Horrors" (a local wax museum) which purportedly contains the actual bodies of Count Dracula (Béla Lugosi) and the Frankenstein Monster (Glenn Strange). However, before he is able to warn Wilbur, a full moon rises and Talbot transforms into a werewolf, who proceeds to destroy his apartment while Wilbur is on the line. Wilbur, thinking the call is just a prank, hangs up and continues on with his work day. Immediately thereafter, the actual Mr. McDougal (Frank Ferguson) shows up to claim the shipments and, fearing them damaged when Wilbur and Chick mishandle them, demands that the crates be delivered in person so his insurance agent can inspect them.
In the futuristic city of Metropolis humans and robots coexist. Robots are discriminated against and segregated to the city's lower levels. A lot of Metropolis' human population are unemployed and deprived, and many people blame the robots for taking their jobs.