It's been 21 years since computer programmer and Encom CEO Kevin Flynn (JEFF BRIDGES) disappeared and left his young son, Sam, as an orphan. Now 27 and still majority owner of Encom, Sam (GARRETT HEDLUND) wants little to do with the company and spends his time engaging in various adrenaline based adventures. After sneakily releasing Encom's latest software offering to the world for free, Sam gets a visit from Alan Bradley (BRUCE BOXLEITNER). He's Kevin's former business partner who claims he received a page from the long-defunct arcade where Flynn had his office and computer research lab.
Sam reluctantly goes there to check it out, finds his father's hidden facility, and unknowingly activates a digitizer laser that instantly transports the young man into "the grid," a digital but physical representation of the inside of a computer world. There, programs appear as human figures and any number of vehicles serve as the means for information moving back and forth through that world.
Mistaken for an errant program, Sam is entered by Gem (BEAU GARRETT) and her fellow siren programs into a high-tech gladiator style "game." There, he must battle programs equipped with powered flying discs that are zipped toward others, resulting in their destruction should they be struck. Sam manages to survive and is thus brought to this strange world's leader, Clu (JEFF BRIDGES). Sam thinks it's his ageless long-lost father, but Clu is actually a program designed by Kevin to help create a perfect digital world, a task he's taken literally.
Clu -- with the aid of his right-hand program, Jarvis (JAMES FRAN) and flamboyant club owner Castor (MICHAEL SHEEN) -- is after the nowhere to be found Kevin and the life disc the man wears. It may allow his digital doppelganger to escape into the real world, and he's hoping the old man will show up to save his son. Instead, Kevin's assistant and last of her kind isomorphic algorithm, Quorra (OLIVIA WILDE), shows up, rescues Sam, and reunites him with his father who lives outside of the grid.
Kevin doesn't want to engage Clu, knowing that's part of the program's plan, but Sam can't sit idly by, especially when he wants to return his father to the real world. With the young man returning to the grid to take on Clu and his programs, it's a race against time to get out of the digital world before Clu manages to do the same.