In 2035, ten years after the Battle of the Breach, former Jaeger pilot Jake Pentecost, son of Stacker Pentecost, survives by stealing and selling Jaeger parts on the black market in Santa Monica, California. After tracking part of a disabled Jaeger's power core to the workshop of fifteen-year-old Jaeger enthusiast Amara Namani, both are arrested by the Pan-Pacific Defense Corps (PPDC) following a confrontation between Amara’s small, single-pilot Jaeger, Scrapper, and the law enforcement Jaeger, November Ajax. Jake's adoptive sister, Japanese Senator Mako Mori, convinces him to return to the PPDC as an instructor to avoid prison, with Amara as one of his recruits.
At the China Shatterdome, Jake reunites with his estranged former co-pilot Nathan "Nate" Lambert, and together they begin training Jaeger cadets. Meanwhile, Mako and Nate explain that the Jaeger program is under threat from the Shao Corporation's drone program, led by CEO Liwen Shao and Dr. Newton "Newt" Geiszler, which proposes mass-producing Jaeger drones. Mako is scheduled to deliver her final assessment on the drones at a PPDC council meeting in Sydney, but before she can, a rogue Jaeger named Obsidian Fury attacks. In the ensuing battle with Jake and Nate's Jaeger, Gipsy Avenger, Mako is killed, and Obsidian Fury escapes.
Before her death, Mako transmitted the location of a defunct Jaeger facility in Siberia. Jake and Nate investigate the site in Gipsy Avenger, where they are attacked by Obsidian Fury. They manage to defeat the rogue Jaeger and discover that it was piloted by a Kaiju brain, indicating that Kaiju hybrids were being created on Earth.
Shortly after, Shao’s drones, which were deployed around the globe, are hijacked by Kaiju brains installed onboard, turning the Jaeger drones into Kaiju-Jaeger hybrids. The hybrids launch simultaneous attacks on Shatterdomes worldwide, resulting in massive casualties. Dr. Hermann Gottlieb attempts to stop the hybrids but discovers that Newt is behind the plan. His mind had been taken over by the Precursors after he drifted with a Kaiju brain years earlier. Newt orchestrated Mako's assassination and the deployment of the drones to advance the Precursors' plan, aiming to open multiple breaches and invade Earth.
Though Liwen manages to shut down the drones, three Kaiju—Hakuja, Shrikethorn, and Raijin—emerge from the breaches and converge on Tokyo. The team realizes the Precursors’ plan is to use the Kaijus' blood to detonate Mount Fuji, causing all the volcanoes in the Pacific Ring of Fire to erupt and terraform Earth for colonization.
The remaining cadets are mobilized, and Hermann and Liwen repair the four surviving Jaegers. Using rockets powered by Kaiju blood, the Jaegers fly to Tokyo and engage the Kaiju. Initially, they manage to hold off the creatures, but Newt uses robotic parasites to merge them into a powerful "Mega-Kaiju." Three Jaegers are destroyed, leaving only Gipsy Avenger to face the monster. Jake and Amara, taking over for the injured Nate, pilot Gipsy Avenger, while Liwen remotely pilots Scrapper to assist them. They use a rocket to launch Gipsy into the atmosphere and bring it crashing down onto the Mega-Kaiju, killing it. Jake and Amara escape to Scrapper before impact.
After the battle, Newt attempts to initiate another plan but is captured by Nate. Jake warns Newt that humanity will be ready for the Precursors' return, signaling that the war is far from over.
