On July 2, a gigantic alien mothership enters orbit around Earth and deploys several dozen saucer-shaped "destroyer" spacecraft, each 15 miles (24 km) in width. As the destroyers take positions over some of Earth's major cities, David Levinson (Jeff Goldblum), an MIT graduate working for a cable company in New York City, discovers hidden satellite transmissions which he believes to be a timer counting down to a coordinated attack by the aliens.

With the help of his ex-wife Constance Spano (Margaret Colin), a senior White House employee, he and his father Julius (Judd Hirsch) gain entrance into the Oval Office to warn President Thomas J. Whitmore (Bill Pullman) of the impending attack. The President immediately orders large-scale evacuations of the targeted cities, but the aliens attack with advanced directed-energy weapons before these could occur. The President, his daughter, portions of his staff, and the Levinsons narrowly escape aboard Air Force One as the destroyers simultaneously lay waste to Washington, D.C, New York City, Los Angeles, and several other major cities around the world.

On July 3, the United States conducts a coordinated counterattack; Black Knights, a squadron of Marine Corps F/A-18 Hornets participate in an assault on a destroyer near the destroyed city of Los Angeles. Their weapons fail to penetrate the craft's force field, and it responds by releasing scores of smaller "attacker" ships which are similarly shielded and armed with directed-energy weapons, and a one-sided dogfight ensues. Captain Steven Hiller (Will Smith) survives the attack by luring a single attacker to the Grand Canyon.[4] There, he blinds the alien with the braking parachute on his jet and ejects just before running out of fuel, causing both to crash in the desert.

Having parachuted to safety, he subdues the injured alien. Hiller is subsequently picked up by Russell Casse (Randy Quaid), a man who believes he was abducted by aliens and is traveling across the desert with a group of refugees in a convoy of RVs. They take the captured alien to nearby Area 51, commanded by Major Mitchell (Adam Baldwin), where the President and his remaining staff have also landed. Here, it is shown Area 51 conceals a top secret facility housing a repaired attacker and three alien bodies recovered from Roswell in 1947.

When lead scientist Dr. Brackish Okun (Brent Spiner) and his team attempt to remove a "bio-mechanical" suit from the alien, the specimen regains consciousness, attempts escape, and takes control of Okun's mind. When questioned by President Whitmore, it reveals through a telepathic connection that its species travels from planet to planet, destroying all life and harvesting a planet's natural resources before moving on to the next planet. The alien attempts a psychic attack against Whitmore, but is killed. Whitmore orders a nuclear attack on all destroyers using B-2 Spirit bombers; the first one to be hit is the alien destroyer hovering over a deserted Houston, Texas, but this too fails to penetrate the craft's shield and destroys the city instead. As a result, the remaining bombers are called back.

On July 4, Levinson devises a plan to use the repaired attacker to gain access to the interior of the alien mothership in space in order to introduce a computer virus and plant a nuclear bomb on board. This, it is hoped, will cause the shields of the Earth-based alien craft to fail long enough for the human resistance to eliminate them. Hiller volunteers to be the mission's pilot, with Levinson accompanying him to upload the virus. With satellite communications knocked out, the Americans use Morse code to coordinate an attack with the remaining forces around the world, timed to occur when the invaders' shields are set to fail. With few military pilots to man all available aircraft, the battle requires several volunteers, including President Whitmore and Russell. Both have previous combat flight experience.

With the successful implantation of the virus, President Whitmore leads the American jet fighters against an alien destroyer on approach to Area 51. Although the aliens now lack shields, the fighters' supply of missiles are quickly exhausted against the colossal craft and its large complement of assault ships. The underside of the alien craft opens up as its directed-energy weapon prepares to fire on the base. Russell possesses the last remaining missile, but his firing mechanism jams. Changing his plan, he pilots his aircraft into the alien weapon in a suicide attack similar to World War II kamikaze Japanese runs.

The ensuing explosion causes a chain reaction which annihilates the ship. Using this same method, human resistance forces around the world destroy the remainder of the alien ships and saving several surviving major cities, while the nuclear device planted by Hiller and Levinson destroys the alien mothership soon after the duo escape. Hiller and Levinson return unharmed, crash-landing their captured alien fighter in the desert close to Area 51. The world celebrates, and the film ends as the main characters watch debris from the mothership enter the atmosphere like fireworks.