The film begins with Ripley floating through space in the lifeboat, Narcissus. Her lifeboat is picked up and they realize she is alive. Back on Earth, she learns that 57 years have passed since the terrifying events on the Nostromo. She is debriefed by Weyland-Yutani but no one seems willing to believe her story, saying there has been a colony on LV-426 (Acheron) for quite some time that has experienced no problems. They revoke her pilot's licence.
On LV-426, the Jorden family investigate some co-ordinates given to them. Rebecca and her brother are left in the transport while their parents go inside the alien craft. Her father becomes the first new victim of an alien facehugger.
Back on Earth, Carter Burke, one of Weyland-Yutani's people, goes to see Ripley with Lt. Gorman to ask for her help. They have lost all communication with the colony, Hadley's Hope, on LV-426 and intend to send Gorman's team to investigate. Burke wants Ripley to accompany them but she refuses, not wanting anything more to do with Weyland-Yutani but Burke uses a little psychology to convince her that going back might be the only way to rid herself of the nightmares plaguing her since the Nostromo.
Ripley turns him down but has another nightmare, and contacts Burke to agree to go with the team.
Three weeks pass. The ship seems deserted, and then the computer comes online and begins to raise the canopies on the hypersleep capsules housing the rescue team. Weyland-Yutani has enlisted the help of the USCM - the United Space Colonial Marines.
They chatter amongst themselves as they awaken from hypersleep, reaffirming friendships and rivalries. They go to the mess hall and we see Ripley, Bishop, Burke and Lt. Gorman on a separate table from the grunts, which irritates some of the marines. Gorman is a newly promoted lieutenant, and an unknown quantity. They know Burke and Ripley are civilians but seem to know Bishop. Private Hudson convinces Bishop to show them a particular knife trick, and we discover that Bishop is an android, much to Ripley's annoyance, as she no longer trusts artificial persons (synthetics).
At the mission briefing, most of the marines scoff at Ripley's story of the alien. Later, on arrival above LV-426, Sergeant Apone then instructs them to prepare for descent to LV-426 and Ripley offers to help, saying she can work a power-loader.
Apone and Hicks laugh - in respect - as she shows them exactly how capable she is.
Once all the armory is loaded into the APC (Armoured Personnel Carrier), the marines, Ripley and Burke takes seats inside the APC and it is driven onto the Drop Ship.
The Drop Ship:
Most of the marines are still gung-ho over the mission; with Hudson describing all the equipment they have with them, believing they are invincible. Hicks pulls Hudson into his seat and tells him to save it and then goes to sleep despite the turbulent drop through the atmosphere, with Apone having to ask someone to wake him up as they approach the main landing zone.
The Drop Ship puls away as soon as the APC hits the ground. At the edge of the complex, the marines leave the APC and fan out as they approach the main entrance to Hadley's Hope complex. The place seems deserted, though the atmospheric processors have, at least, made the air breathable. They enter the colony and begin the search, noting the barricades and signs of weapon discharge within the corridors. They find a hole in the floor, realizing it must be the acid blood that Ripley had spoken of in the briefing.
They reach the operations center and, in the Med Lab, they discover several stasis cylinders holding hand-like creatures - facehuggers. Two of the creatures are still alive, meaning that they had not yet impregnated a host with an alien.
Movement is detected in the corridor beyond and they see a small shape move into a vent. Vasquez fires but Hicks slams her rifle upwards as he realizes it is a little girl. He and Ripley try to coax her out and Hicks makes a grab for her; she bites his hand. Ripley goes into the duct after the little girl and finds her inside a nest she has created for herself. She coaxes the girl to come out. She discovers the girl is Rebecca Jorden, known as Newt.
While Ripley looks after Newt, Hicks, Hudson, Gorman and the others have located the rest of the colonists in the lower levels of the processing plant, all together, using the PDTs (Personal Data Transmitters) surgically implanted into each adult colonist. Hudson finds them at the processing station, under the main cooling towers, two kilometers away. Leaving Bishop behind to study the facehuggers, they use the armed transport vehicle to cover most of the distance but then have to go down to the lower levels on foot. Gorman remains in the transport with Ripley, Bishop and Burke while Apone leads the team downwards. They reach a point where the walls seem to be covered in some strange material
Ripley realizes it would be dangerous to use the heavy duty guns carried by the marines because they could rupture the cooling system, resulting in a thermonuclear explosion. Apone makes them hand in their clips but Vasquez has hidden some away and hands one clip to Drake. They find a colonist alive, she begs them to kill her, and as they watch, her chest bursts open and an alien comes out. Suddenly, all hell breaks loose as the adult warrior aliens reveal themselves and attack.
Gorman freezes, uncertain what to do as the life signs for the marines start to go out as each is killed or taken away to be aliens hosts. Ripley is yelling at Gorman to do something to help them, but he is at a loss. She races to the driver's seat and sends the transport hurtling to a rendezvous point. Gorman loses his balance as he tries to stop her and is knocked unconscious.
Ripley gets to the surviving marines and helps them inside, Drake is sprayed with acid, and killed, leaving Hicks and Vasquez to try and seal the door as an alien warrior attempts to get inside. Hicks jams his rifle muzzle into the alien's mouth and fires, destroying it, and then manages to get the door closed. Ripley drives like a maniac to get them out of the place, and eventually crashes the transport some distance away, breaking its transaxle. Hicks has to ease Ripley's white-knuckled hand from the throttle. They are half a kilometer from the station.
Ripley tells them that the only way to ensure the aliens are destroyed is to nuke them. With Gorman still unconscious and Apone dead, Hicks is in charge, and he agrees with Ripley. The best course of action would be to return to the Sulaco and then nuke the whole site from orbit to destroy all the aliens. He calls Ferro and tells her to prep for dust-off, wanting an immediate evacuation.
The group file out of the severely damaged APC. As the co-pilot sealed the hatch, he had noticed a viscous, sticky liquid but thought nothing of it at the time. The pilot calls for him when he does not return to the co-pilot seat, turns at a sound and comes face to face with an alien. While they watch from the ground, the Drop Ship goes out of control and crashes, almost on top of Ripley, Hicks and the rest. Hudson has an attack of hysterics, and Hicks has to deal with him.
With daylight fading, Newt tells them they have to get back inside as the aliens mostly come out at night. They go back to the control center, knowing it is the easiest place to barricade.
In the meantime, the marines have barricaded the control center, in the hopes that it will hold long enough for them to escape. Ripley orders Hudson to pull up the blueprints so they can locate any access to the complex. They set up robot sentry guns in the corridor and service tunnel that are triggered by movement, testing them before sealing them.
Hicks gives Ripley a wrist locator saying, it doesn't mean we are engaged.
Ripley carries Newt to get some rest, and she gives her the wrist locator. Ripley discovers that Burke has ordered Bishop to prepare the live facehuggers for transportation, against her agreement with Burke. She reveals that she checked the log and discovered that it was Burke who sent the colonists out to the ship without even a warning and threatens to expose what he did. As she strides back to the operations room, an alarm sounds.
The robotic sentries start firing and they watch as the counter drops as the aliens keep on attacking through the service tunnel. Warnings flash that they are both low on ammo, and finally empties. The aliens are battering at the pressure door, trying to get in. Bishop calls to Hicks and Ripley, informing them of another problem. He shows them the emergency venting and estimates that the processor will blow in four hours. Ripley tells them they need to get the second Drop Ship down from the Sulaco. However, the transmitter on the APC was destroyed, and the hardwiring between the operations center and the colony transmitter is damaged. The only option is for someone to take a portable unit and patch in to the dish manually so it can be aligned.
The dish is at the other end of the complex and Hudson won't go, but Bishop offers. Bishop is the only person alive who is capable of automatically piloting the Drop Ship from the Sulaco. The battering at the pressure door stops; the aliens are in the complex. They find a pipe, barely wide enough to accommodate a man lying down, that leads there directly to the uplink assembly, and Vasquez seals him inside it, leaving Bishop to drag himself through the small pipe with the hope that he will not meet any aliens.
An alarm blares through the complex. The final two robot sentries start firing. One gun empties, the rate having slowed to short bursts and the second gun finally stops with just ten rounds left. They hope the aliens do not attack that way again as there is nothing to stop them now.
The others go off, leaving Ripley alone with Hicks. Ripley asks Hicks to take care of it, if the aliens get inside, not wanting to end up like the others. In response, Hicks promises to do them both if it comes to it. Then he introduces her to the M-41A 10mm pulse rifle with grenade launcher. He shows her the basics but, teasingly, she orders him to show her everything the rifle can do. He does as she asks.
Gorman comes round and takes command, obviously prepared to listen to Burke. Ripley enters the Med Lab and, on a hunch, she checks for and finds Newt under the bed. She lays her pulse rifle on top and crawls under there to sleeps beside Newt. She awakens an hour later, knowing something is wrong, and then realizes that someone has opened the cylinders to allow the two facehuggers to escape. She eases up to reach her rifle, but it has gone. She manages to trap one by its tail between the wall and the bed, momentarily, and they retreat to the door. It will not open, disabled from the outside. Ripley tries to attract Hicks' attention by waving beneath the surveillance camera, but Burke is watching and switches it off. All attempts to escape the lab fail until Ripley has an idea, sets fire to some papers and holds them under the fire alarm sprinkler system, bringing Hicks to her immediately as the fire alarm sounds.
Ripley is fighting for her life, with the tail of one facehugger wrapped around her throat as it tries to grab her head so it can force a tubule down her throat to impregnate her with an alien. Newt manages to trap the other between a desk and the wall. Hicks and the others arrive, shooting through the observation window and manage to wrestle the facehugger off Ripley and destroy both.
Ripley accuses Burke of being the one to release the facehuggers. She says that Weyland-Yutani need a live alien for its experiments and what better way to smuggle them onto Earth than inside a human host, and sabotage the hypersleep capsules on the others. Both Hudson and Hicks want to kill Burke but Ripley tells them to lock him up... and then the lights go out.
The tracker devices starts to blip, warning them that the aliens are massing to attack again. Hudson is panicking, while Hicks and Vasquez seal the door with power-solders. However, the aliens keep coming, and eventually, they realize that the distance would place the aliens inside the room with them.
Ripley has a thought and Hicks clambers up to look inside the ceiling crawlspace, shocked to see aliens coming towards him. They start firing as the ceiling collapses, with Vasquez pulling Hicks to his feet, and they all run for the far exit, only to discover Burke has reached it first and sealed them all inside. However, Burke's escape is short-lived as there is an alien waiting for him.
Hicks gets them through the sealed door into a small cubicle but Burke has locked the only exit while Hicks seals them into the room. Newt grabs Ripley's hand and leads her to the ventilation duct and they clamber in, having lost Hudson to one of the aliens back in the operations room. Newt, Ripley and Hicks head out with Gorman and Vasquez right behind. Hicks contacts Bishop and tells them they are on their way to him. He, Ripley and Newt reach a ventilation fan. Ripley gets across, and now it's Newt's turn. However, Vasquez is hit with acid and Gorman goes back for her. He and Vasquez become trapped together. Vasquez gives him a power-grip, one she reserves for only the worthy in her eyes. Gorman decides he'd rather die quickly than become a host for more aliens. He hands her two grenades and arms another two and Vasquez wraps her hands over it too as they wait the final few seconds before detonation.
When the grenade explodes, the shock wave causes Newt to fall through the fan's vents. Both Ripley and Hicks try to hold on to her but she slips out of their grasp. Ripley shouts out in fear and shock, but Hicks tells her they can find Newt. Using the wrist locator, Ripley and Hicks go racing after her. They find her in an under-floor, water-filled area and Hicks starts to cut through the floor grille. However, they are too late, and by the time he has opened up a gap, an alien has taken Newt.
With aliens closing in on them, and the knowledge that Bishop has got the Drop Ship, Hicks convinces Ripley that they have to go. They race to the elevator. The doors will not close right away, and then an alien attacks. Hicks shoots it at close range, as he is splattered in its acid blood. Ripley helps him strip off his body armor but he is badly burned and she has to help him get to the Drop Ship.
Once there, she asks Bishop how much time they have before the explosion. She tapes several weapons together, determined not to leave Newt behind. Hicks is badly hurt, and self-administers a painkiller. He wishes her luck, and they exchange first names.
Ripley uses the locator to find Newt within the processor. Along the way, she discovers Burke and offers him a means to take his own life. She finds Newt just in time, destroying the opening egg and the facehugger that is about to pounce upon its intended victim.
On their escape, they stumble into a room filled with eggs, and find what is laying those eggs. The queen alien is massive. She is attached to a huge egg-laying tube but, when Ripley threatens to use the flamethrower to destroy many of her eggs, she commands the approaching alien warriors to stay back. As she reaches the exit, Ripley does fire upon the eggs with the grenade launder and flame thrower.
She and Newt race away, knowing they have only minutes before Bishop is forced to abandon them. When she reaches the landing pad, there is no sign of Bishop and she screams in despair, and then the Drop Ship appears. Bishop had been forced to take to flight as the landing pad had become too unstable. They manage to escape the radius of the blast and reach the Sulaco.
While waiting, Bishop had started to dress Hicks' burns, covering one side of his face and torso with bandages. They leave the Drop Ship, intending to get a stretcher so they can carry Hicks to the medical bay. While Bishop is talking, suddenly he is speared through the abdomen and then torn apart at the waist. Some how, the alien queen managed to get onto the Drop Ship while it was momentarily trapped during the escape attempt.
Ripley races to relative safety, and discovers the power-loader. She straps herself in and confronts the Alien Queen, "Get away from her, you bitch."
During the fight, Ripley manages to get them both into the space cargo-air lock. She opens the door and, as the air rushes out, Newt loses her grip but it caught and held by what remains of Bishop.
The Alien Queen is swept out into space and destroyed.
Ripley secures Bishop into a hypersleep capsule and checks on Hicks. He is already in hypersleep, dressed only in his shorts and heavily bandaged. Newt asks her if they can dream and Ripley replies that they both can. She and Newt go into their hypersleep capsules... and sleep.