Ellen Ripley's escape shuttle drifts in deep space for fifty-seven years before being salvaged by a deep-space recovery team. She awakens in an orbital hospital station to find that the Weyland-Yutani Corporation dismisses her account of the alien organism that destroyed the Nostromo, stripping her commercial flight license. To make matters worse, she learns that the moon where they encountered the derelict ship, LV-426, has been terraformed and colonized by sixty working families for over two decades.
When contact with the colony of Hadley's Hope is abruptly lost, corporate representative Carter Burke and Lieutenant Gorman of the Colonial Marines approach Ripley. They offer to reinstate her rank and pension if she joins an expeditionary force as an advisor. Plagued by recurring nightmares, Ripley agrees under the strict condition that the mission is to exterminate the creatures, not capture them.
Aboard the military assault ship USS Sulaco, Ripley meets the squad of Colonial Marines, including Corporal Hicks, Private Hudson, and the synthetic officer Bishop, whom Ripley initially distrusts due to Ash's past betrayal. The team lands on the storm-ravaged moon and breaches the abandoned colony complex, finding bullet-riddled corridors, barricades, and acid-etched floors. In the medical wing, they discover living facehugger specimens preserved in jars, and soon rescue a traumatized, feral young girl nicknamed Newt, who survived inside the ventilation ducts.
Tracking the colonists' personal transponders, the Marines enter the sub-level processing station, only to find the walls converted into a bio-mechanical hive made of hardened resin. The colonists are cocooned inside the walls as hosts for gestating chestbursters. When the squad immolates a bursting host, the alien swarm awakens from the shadows. In a frantic, chaotic ambush, most of the squad is wiped out as acid blood melts their armor and creatures drag soldiers into the darkness. Ripley seizes the APC vehicle, crashing through bulkheads to rescue Hicks, Hudson, and Vasquez.
With Gorman incapacitated, Hicks assumes command and accepts Ripley's recommendation to fall back to orbit and nuke the entire complex from space. However, a stowaway alien kills the drop-ship pilots, causing the aircraft to crash and destroy the APC, stranding the survivors on the surface. They fortify the colony operations center with automated sentry guns while Bishop discovers that the damaged reactor's cooling system is critically failing, setting a hard four-hour countdown before the entire facility detonates in a massive thermonuclear blast.
Burke attempts to secure alien samples by releasing two facehuggers inside the medical room where Ripley and Newt are sleeping, hoping to smuggle embryos back to Earth inside their bodies. Ripley triggers a fire alarm, alerting the Marines, who rescue them just in time. Before they can execute Burke for treason, the creatures cut the power and breach the compound through the ceiling tiles. Burke flees and is killed, Hudson makes a heroic final stand, and Vasquez and Gorman sacrifice themselves with a grenade in the air vents. During the chaos, Newt falls down an air shaft and is captured by a warrior drone.
Armed with a pulse rifle and flamethrower strapped together, Ripley descends alone into the heart of the hive beneath the failing reactor. She finds Newt cocooned and frees her, stumbling directly into the egg chamber of the massive Alien Queen. Ripley incinerates the nest and eggs with her flamethrower and grenades, infuriating the Queen. Ripley and Newt sprint through collapsing gantries to the elevator, narrowly escaping with Bishop in a secondary drop-ship right as the reactor goes critical and vaporizes Hadley's Hope.