17 weeks after the events of Aliens, a full battalion of Colonial Marines travels to LV-426 aboard the USS Sephora in response to a distress call sent by Corporal Dwayne Hicks. Upon arrival, the Sephora docks with the USS Sulaco, now somehow in orbit around LV-426 despite last being sighted above Fiorina "Fury" 161, and sends Marines aboard to investigate. A massive Xenomorph infestation is discovered inside the ship and several Marines are killed in the initial onslaught. While investigating the ship, Corporal Winter, Private O'Neal and Private Bella Clarison discover Weyland-Yutani PMCs are now in command of the Sulaco and have been breeding Xenomorphs on board for study.

The hostile corporate mercenaries attack the Sephora using the Sulaco's weaponry and both ships are destroyed after the Sephora retaliates. Winter, O'Neal, Bella, their commander Captain Cruz, Sephora android Bishop and pilot Lieutenant Reid escape aboard Reid's dropship and take shelter in the ruins of the Hadley's Hope colony complex on LV-426, which now lies almost completely destroyed after the detonation of its Atmosphere Processing Plant. Cruz orders all remaining Colonial Marine survivors to gather at the colony, in the hope of holding out until a rescue arrives. While investigating the ruins of the colony, Winter discovers Xenomorphs that only react to sound and movement and attack by suicidally exploding, as well as the corpse of Sulaco Marine Private Hudson.

With their position as secure as they can hope to make it, Cruz orders Winter to travel to a nearby Weyland-Yutani research facility set up near the derelict ship and recover a manifest that identifies an unknown prisoner the company has captured, apparently a survivor from the Sulaco. It transpires that Bella is impregnated with a Chestburster, and in an attempt at saving her, Winter and O'Neal accept the mission and escort Bella to the facility, where they intend to "convince" surviving personnel to remove the embryo. However, upon arrival, an interrogated Weyland-Yutani medical officer explains to them that Bella's life cannot be saved since, even if the embryo is successfully extracted, the creature's invasive placenta is cancerous and will kill her anyway. Bella dies when the Chestburster hatches while she is saying goodbye to Winter and O'Neal.

Winter and O'Neal recover the manifest they were sent to find and rescue the prisoner, revealed to be Corporal Hicks, who explains that Weyland-Yutani intercepted and boarded the Sulaco prior to its arrival at Fiorina 161. A fire in the hypersleep bay subsequently caused Ripley, Newt and Lance Bishop to be jettisoned from the ship in an EEV, along with the body of an unidentified man who was mistaken for the Corporal. Hicks himself was captured by Weyland-Yutani personnel and subjected to torture during interrogation, overseen by Michael Weyland in an attempt to learn more about the Xenomorphs' origins and to gain control of the Sulaco's weapon systems.

From Hicks, the Marines on LV-426 learn that an FTL-capable ship is docked at the research facility, representing the last chance for the survivors to escape the moon. After gathering the remaining Sephora personnel and fighting off a Xenomorph attack on the colony, Captain Cruz orders an all-out assault on the Weyland-Yutani complex in the hopes of capturing the FTL vessel. Winter and Hicks spearhead the advance, but the ship leaves minutes before they can reach it. In a last desperate attempt, Cruz pilots a dropship up to the escaping vessel and crashes into its hangar. Winter is confronted by the Xenomorph Queen in the hangar bay, and attempts to eject her using a cargo launching system, but fails when she climbs back aboard. Cruz sacrifices himself when he launches the crippled dropship directly into the Queen, propelling both out into the upper atmosphere of LV-426.

Winter, O'Neal, Reid, Bishop and Hicks find and confront Michael Weyland, but Hicks deduces he is merely an android double left behind as a decoy and summarily executes him. In search of useful intelligence, Bishop connects to the destroyed android's CPU and states that he has "everything", setting the stage for further confrontation between the Colonial Marines and the Weyland-Yutani Corporation.