In 1996, following the death of SpaceGodzilla, Miki Saegusa of the United Nations Godzilla Countermeasures Center (UNGCC) travels to Birth Island to check on Godzilla and Little Godzilla, only to find the entire island destroyed and both monsters missing. Not long afterwards, Godzilla reappears in Hong Kong, its body covered in glowing lava-like rashes and destroys great swathes of the city with an empowered version of its atomic breath. The JSDF hires college student Kenkichi Yamane, the grandson of Dr. Kyohei Yamane, to work at the center in an attempt to unravel the mystery of Godzilla’s condition. Yamane suspects that Godzilla’s heart, which acts as a nuclear reactor, is undergoing a nuclear meltdown as a result of Godzilla absorbing the energy released from a uranium deposit on Birth Island that had been triggered by a volcanic eruption. Yamane theorizes that when Godzilla’s temperature reaches 1,200 °C, it will explode with a force approximately “1,000 times greater than all nuclear weapons put together, a burst of power unseen since time began,” which will be hot enough to ignite Earth’s atmosphere and reduce the planet’s surface to ash.

The JSDF deploys a flying combat vehicle outfitted with anti-nuclear cold weapons, the Super X III, in an effort to reverse Godzilla’s self-destruction; while Godzilla’s meltdown is not stopped, it is halted long enough to temporarily render it unconscious. Meanwhile, scientists discover that Dr. Serizawa’s Oxygen Destroyer, which was used against the original Godzilla in 1954, has awoken and mutated a colony of Precambrian organisms lying dormant in Tokyo Bay, which were then freed from the surrounding rock during the construction of the Tokyo Bay Aqua Line. The creatures combine into several man-sized crab-like creatures and begin wreaking havoc after killing all the fish in an aquarium. After several deadly skirmishes with the JSDF, the creatures, dubbed “Destoroyah”, merge into a single aggregate form, which then transforms again into a flying form and leaves the scene.

Meanwhile, Godzilla awakens from its encounter with the Super X III. With the runaway nuclear reactions in its heart continuing to progress, Godzilla’s condition has worsened to the point that it will suffer a bodily meltdown which could potentially destroy the planet through a China syndrome-like incident. Miki locates Little Godzilla – now named Godzilla Junior – who has grown significantly as a result of the destruction of Birth Island and resembles the larger Godzilla very closely. Miki is instructed to telepathically lure Godzilla Junior to Tokyo, hoping that Godzilla will follow and be killed by Destoroyah. Junior arrives and battles Destoroyah’s Aggregate, who severely injures Junior by sending micro oxygen into the wound, and Flying form, who is seemingly defeated after being blown into an electrical plant. Godzilla arrives at Haneda Airport and reunites with Godzilla Junior, only for the electrical plant at which Destoroyah was defeated to suddenly explode, revealing Destoroyah’s final, Perfect form, which was created after the aggregate absorbed Junior’s DNA during the previous fight. Before Godzilla can fight Destoroyah, Destoroyah kills Junior by dropping it from a great height onto Ariake Coliseum and blasting it with its Micro-Oxygen beam leaving Miki and Godzilla devastated over Junior’s death. After being dragged away from the location of Junior by Destoroyah, Godzilla manages to subdue its adversary for just long enough to reach the airport for a second time. Godzilla mournfully approaches the body of Junior.

Godzilla tries to revive Godzilla Junior. Godzilla’s radiation levels have increased to the point that the air it exhales briefly brings Junior back to life, but only for a few seconds, and Junior dies again, this time at Godzilla’s feet. Enraged and bereaved, Godzilla’s meltdown begins to accelerate, but Destoroyah returns, brutally attacking Godzilla. In the ensuing battle, which rages across the airport and neighboring areas of Tokyo, Godzilla’s meltdown gives it an extremely powerful version of the heat ray, the Infinite Heat-Ray. Destoroyah is severely wounded by Godzilla after it fires the beam through Destoroyah’s shoulder and head frill. Realizing the odds are against it, Destoroyah tries to retreat, but the JSDF shreds Destoroyah’s wings after firing on it with a set of freezer tanks. Destoroyah plummets to the superheated ground and is killed instantly, dissipating into a white mist.

Godzilla, having avenged Godzilla Junior, slowly begins to die from the meltdown, but the JSDF is able to minimize the damage with the freezer weapons. While successful in preventing Earth’s destruction, the JSDF is unable to prevent the massive nuclear fallout from rendering Tokyo uninhabitable while Miki tearfully says goodbye to Godzilla. Suddenly, the radiation levels plummet and a familiar roar is heard. Godzilla Junior, having absorbed the energy from the senior Godzilla’s death, has not only revived but grown into the new Godzilla.