In the remote tundra of Antarctica, members of Kord Industries, led by the company's co-founder and CEO Victoria Kord, locate an ancient alien artifact known as the Scarab.
Meanwhile, Jaime Reyes returns to his hometown of Palmera City after graduating from Gotham Law University, only to learn that his family is facing eviction from their home due to financial difficulties. Jaime's sister Milagro manages to get him a job at Victoria's mansion. However, both are fired after Jaime stops a confrontation between Victoria and her niece Jenny. Jenny later tells Jaime to meet her at Kord Tower the next day to discuss a "job opportunity".
The next day, Jenny finds that Victoria is using the Scarab for her One Man Army Corps (OMAC) projects. She steals the Scarab and avoids security by giving it to Jaime, hidden inside a Big Belly Burger to-go box. At home, Jaime's family convinces him to open the Scarab box. When Jaime touches it, the Scarab activates and fuses with him, encasing him in an armored exoskeleton.
Jaime later finds Jenny for answers, rescuing her from Victoria's armed forces. She tells Jaime that the Scarab is a sentient weapon and that it has willingly chosen Jaime to be its host. With the help of Jaime's uncle Rudy, Jaime and Jenny break into Kord Tower to retrieve a smartwatch that once belonged to Jenny's father Ted, but are attacked by Victoria's bodyguard Ignacio Carapax, who has an OMAC prototype infused in his body. The Scarab is revealed to be named Khaji-Da. It temporarily takes over Jaime's body and battles Carapax. Rudy and Jenny help incapacitate Carapax, then escape to Jenny's childhood home with Jaime.
Jenny uses Ted's watch to activate his secret laboratory and reveals to Jaime that Ted was originally a vigilante named Blue Beetle who spent his life studying Khaji-Da before mysteriously disappearing, leaving his company in Victoria's hands. When they notice Victoria's helicopter flying toward Jaime's home, Jaime summons Khaji-Da and returns to protect his family. As they escape, Jaime's father, Alberto, however, collapses and dies from a heart attack, distracting Jaime and allowing Carapax to capture him. Jaime is taken to an island fortress near Cuba, where he is strapped to a machine that downloads information from Khaji-Da to the OMACs. While unconscious, Jaime sees a vision from his father, who encourages him to embrace his destiny as the new Blue Beetle. Jaime awakens and escapes as Carapax's OMAC suit activates and evolves into a more powerful form.
Jenny and the Reyes family use Ted's Bugship and its weapons arsenal to storm the island. Jaime reunites with his family, then encounters Carapax and battles him. Jaime nearly kills Carapax before Khaji-Da reveals to Jaime memories of Carapax's enslavement by Victoria for the OMAC experiments, including Carapax's mother's death at Victoria's hands, leading Jaime to spare him. Carapax rebels against Victoria and sets his OMAC suit to explode, destroying the island, himself, and Victoria as vengeance for his mother. As the Reyes family escapes from the island, they take time to mourn Alberto.
In the aftermath, Jenny becomes the new CEO of Kord Industries and promises to repair the damage caused to the Reyes family, by helping them rebuild their home. As the neighbors gather around the remains of the Reyes family's home and provide support, Jaime kisses Jenny and then offers to fly her to the Kord Estate.
In a mid-credits scene, a distorted recording is broadcast in Ted's laboratory, attempting to inform Jenny that he is alive.
