A group of martial arts and combat masters are invited to a fighting contest, “Dead or Alive”, on an isolated island within an advanced complex, with the ultimate prize of $10 million. Among the competitors are Kasumi, a shinobi ninja-princess looking for her brother Hayate (who was competing in the last tournament), Tina, a professional wrestler setting out to prove she has more potential (complicated by her father Bass being one of the contenders), Christie, a master thief and assassin, her treacherous partner Maximillian ‘Max’ Marsh, and Hayabusa, a friend of Kasumi and Hayate who follows Kasumi to keep her safe, using the invitation to DOA for this. A final competitor is Helena Douglas, daughter of the tournament’s late founder. When they arrive, they are monitored by the island’s supervisor, Dr. Victor Donovan, who, aided by egghead Weatherby, is gathering data (using injected nano-sensors) from the fights for some mysterious project. To add to the situation, an assassin from Kasumi’s colony, named Ayane, has followed Kasumi to kill her and wipe away the disgrace the princess has caused to the clan.
The contest plays out, with multiple contestants fighting and being defeated (including Gen Fu, Bayman, Leon, and Zack), until only Kasumi, Christie, Hayabusa and Tina are left, with Helena being defeated by Christie. During the course of the film, Max and Christie form a plan to steal the fortune stowed away inside a hidden vault. During her fight, Christie sees that the key to finding and unlocking the vault is a tattoo on the back of Helena’s neck. Meanwhile, Kasumi begins to suspect Donovan of lying about her brother being killed in the previous tournament, and Hayabusa, infiltrating the main facility to find the truth, is captured. She is more than once confronted and nearly killed by Ayane, who Kasumi tries to convince that Hayate is alive (since it is eventually clear that Ayane loves Hayate). Also, Weatherby begins to fall for Helena, and in the end tells her about what he knows of the mystery project, and that before Helena’s father could shut the project down, he died (indicating that he was murdered).
On the final day of the tournament, wondering where Hayabusa is, Kasumi, Christie and Tina look for him and discover a secret entrance to the main complex, where they find Hayabusa unconscious. They are then gassed and captured. Meanwhile, Helena resolves to stop the mystery project, and has to fight the armed staff of the island, sent to kill her and Weatherby by Donovan. They are followed inside by Max, who finds his way to the vault, and is then knocked out by Bayman, who is working for Donovan. Inside the main complex, Donovan shows the four semifinalists the project he has been developing; an advanced form of neural interface that allows him and others to use the fighters’ combined skills to become the ultimate fighter. After ‘downloading’ the data into the device (shaped like a pair of sunglasses), he then shows that he kept Hayate alive and in peak condition to test the technology. He challenges Hayate to fight and win, if the others are to survive. Hayate accepts and is defeated, then thrown through a wall to die. Hayate is saved by Ayane, and the two of them apparently accept each other.
With the successful demonstration, Donovan prepares to sell the technology around the world, and begins “downloading” it to the watching buyers. Weatherby stops the broadcast and alerts the CIA, which provokes Donovan to head for them. Helena keeps Donovan back while Weatherby frees the others, but both are defeated and Donovan activates a self-destruct sequence which will obliterate the base. Kasumi, Helena, Christie, Tina, Ayane, and Hayate launch a combined attack on Donovan, while Hayabusa and Weatherby find Max and escape with him, despite Max’s urge to go back for the money. During the battle with the fighters, Donovan’s ‘glasses’ are knocked off and he is easily paralyzed by Hayate and Kasumi. The fighters then all escape as the base explodes and Donovan is consumed by the flames, making their escape by a hijacked pirates’ boat.
In the final scene, Helena, Ayane, Christie, Tina, and Kasumi are shown together again preparing to fight an army of ninja in Kasumi’s palace.