During the events of Aliens, Carter Burke manages to send a message to Weyland-Yutani confirming the existence of the Xenomorph species. In response, the company dispatches an expedition to LV-426 — including the command ship Resolute and the advanced research transport USS Legato, the latter of which carried a cargo of human colonists kept in stasis to be used as hosts to breed Xenomorphs. However, the expedition arrived at the moon only after the destruction of Hadley's Hope and the departure of the USS Sulaco. After investigating the coordinates of the derelict ship, the Weyland-Yutani team discover the ruins of the craft and immediately harvest the Eggs found on board. They begin establishing a research facility there, and also start breeding and studying Xenomorphs aboard the Legato, using the colonists as hosts. The company pinpoints the location of the Sulaco through the network and the colony's computer logs, sending the Legato to intercept the cruiser. Just as the corporates connect their ship with the Sulaco, a Xenomorph outbreak erupts on the Legato.

Colonist Lisbeth Hutchins awakens from stasis and pulls a dead Facehugger from her face. She quickly meets fellow colonist Ethan, who tells her what little he knows of the situation and that she must find her parents and escape. Ethan is then killed when a Chestburster erupts from his chest. Unarmed, confused and terrified, Lisbeth makes her way through the infested ship, witnessing Weyland-Yutani PMCs incinerating impregnated colonists with flamethrowers in an attempt to contain the outbreak. Another colonist called Andrews aids Lisbeth, but is quickly killed by a Xenomorph Warrior. Finally Lisbeth meets with Samwell Stone and Turk and the trio make plans to escape to the Sulaco, which they recognize as a military vessel and which is still connected to the Legato by an umbilical.

Upon reaching the umbilical, Lisbeth refuses to leave her parents, and she heads back into the Legato alone while Stone and Turk head across to the Sulaco to find military assistance. Lisbeth eventually finds both of her parents dead, at which point she begins to feel sickness and pain in her chest — realizing she has been impregnated with a Chestburster, she rallies herself and decides to destroy the ship to put a stop to what Weyland-Yutani has done. She manages to fight her way to the Legato's self destruct system, which she activates before the creature inside her hatches, killing her just as several Xenomorphs appear and watch the birth. Moments later, the Legato is completely destroyed by the explosion.

After evacuating the Legato, Stone and Turk make their way to the hypersleep chamber aboard the Sulaco, where they find Ripley, Newt, Bishop and Corporal Hicks in stasis; they wake Hicks in the hope that he can help them escape the situation. As he revives, Hicks notices a Facehugger attached to Ripley in her cryotube. Three Weyland-Yutani PMCs enter the area and a firefight erupts, during which a stray bullet grazes the Facehugger and causes the creature's acidic blood to start an electrical fire.

During the confrontation, Turk is thrown into Hicks' empty cryotube by a PMC, who then traps him by shutting the lid; the Sulaco begins the evacuation procedure for the occupied cryotubes in response to the fire, and Turk is subsequently loaded into a Type 337 EEV alongside Ripley and Newt and ejected from the ship. Stone and Hicks plan to follow the EEV and try and save Ripley, but first they have to detach from the Legato, which is due to be destroyed by Lisbeth at any moment. They fight their way through the PMCs and numerous Xenomorphs on board the Sulaco and use a mounted exterior gun to destroy the umbilical and separate the two vessels just seconds before the Legato self destructs. Stone and Hicks continue to fight their way through the Sulaco, hoping to reach a service craft that they can use to escape. They succeed, and set a course for Fiorina 161.

However, owing to the speed at which the Sulaco had been traveling through space, the journey takes them two days and when they finally arrive at the Fiorina 161 Class C Work Correctional Unit they are just in time to witness Ripley throw herself into a furnace to destroy the Xenomorph Queen gestating inside her. Hicks and Stone are subsequently captured by Michael Weyland and several Weyland-Yutani Commandos, who take them back to LV-426.

While in captivity aboard the Resolute at the newly constructed Origin Facility, Hicks and Stone are interrogated by Michael Weyland for the access code to a recorded distress call that Hicks intended to send to the United States Colonial Marine Corps; when Stone denies any knowledge of such a message he is executed by one of the PMCs. Hicks is chemically tortured for information while Weyland boasts how the colonists and human life in general are of little concern to him. His callousness spurs Weyland-Yutani researcher Rick Levy to turn against his superior, releasing Hicks and holding Weyland and his PMCs at gunpoint. They fight their way through the Resolute and escape the ship by jettisoning in an EEV, despite the fact they are within LV-426's atmosphere.

Once on the ground, Hicks and Levy push through the research complex in the midst of a Xenomorph outbreak, hoping to reach an uplink from which they can send the distress call. Hicks and Levy stray into an extensive cave complex beneath the site and discover the second Acheron Queen, which they narrowly escape. They eventually arrive at a communications relay station and attempt to send Hicks' message from there. While in the process of sending the call, Weyland contacts them and tells Levy he will not permit him to send the call and jeopardize what he is trying to accomplish. Weyland then destroys the relay with a missile, severing the uplink after only part of Hicks' distress call could be sent. The relay station is quickly surrounded by PMCs arriving in APCs, and Hicks and Levy are recaptured. Meanwhile, several researchers restrain the Xenomorph Queen nearby.