Mortal Kombat is a martial arts tournament that takes place once every generation between the representatives of the realms of Earth and Outworld conceived by the Elder Gods amid looming invasion of the Earth by Outworld. If the realm of Outworld wins ten consecutive victories, its Emperor will be able to invade and conquer the Earthrealm. They have already won nine times. Shaolin monk Liu Kang and his comrades, action movie star Johnny Cage and military officer Sonya Blade were handpicked by Rayden, the god of thunder and defender of the Earth realm, to overcome their powerful adversaries in order to prevent Outworld from winning their tenth straight Mortal Kombat tournament. Each of the three has his or her own reason for competing: Liu seeks revenge against the tournament host Shang Tsung for killing his brother Chan; Sonya seeks revenge on an Australian crime lord Kano for murdering a fellow officer; and Cage, having been branded as a fake by the media, seeks to prove otherwise. Johnny and Sonya are unaware of the supernatural and of the true nature of the tournament at first, but are gradually convinced.
At Shang Tsung’s island, Liu is attracted to Princess Kitana, the Emperor’s adopted daughter. Aware that Kitana is a dangerous adversary because she is the rightful heir to Outworld and that she will attempt to ally herself with the Earth warriors, Tsung orders the creature Reptile to spy on her. Liu defeats his first opponent and Sonya gets her revenge on Kano by snapping his neck. Cage encounters and barely beats Scorpion. Liu engages in a brief duel with Kitana, who secretly offers him cryptic advice for his next battle. Liu’s next opponent is Sub-Zero, whose defense seems untouched because of his freezing abilities until Liu recalls Kitana’s advice and uses it to kill Sub-Zero. Prince Goro enters the tournament and crushes every opponent he faces. One of Cage’s peers, Art Lean, is defeated by Goro as well and has his soul taken by Shang Tsung. Sonya worries that they may not win against Goro, but Rayden disagrees, declaring that their own fears and egos are preventing them from winning the tournament. Rayden points out Cage’s fears of accepting he’s a fake, and Sonya’s reluctance in accepting help when she needs it, then calls Liu Kang out for fleeing to America, which caused him to disgrace his ancestor and indirectly resulted in his brother’s death.
Despite Sonya’s warnings, Cage approaches Shang Tsung to demand a fight with Goro upon the realization that, as Mortal Kombat, the competition favors the mortal Earthrealm fighters. The sorcerer accepts on the condition that he be allowed to challenge any opponent of his choosing, and though Rayden tries to intervene, he is too late as the conditions are set. He is nonetheless impressed when Cage shows his awareness of the gravity of the tournament. Cage faces Goro and uses guile and the element of surprise to defeat the defending champion, who falls off a cliff to his death. The desperate Tsung abducts Sonya and takes her to Outworld as his chosen opponent. Knowing that his own powers are ineffective there and that Sonya cannot defeat Tsung, Rayden sends Liu and Cage into Outworld in order to rescue Sonya and challenge the sorcerer. In Outworld, Liu is attacked by Reptile, but eventually defeats him. Kitana then meets up with the mortals, revealing to them the origins of both herself and her home realm of Outworld. She helps them to infiltrate Tsung’s castle while advising Liu Kang about three challenges in the castle: facing his enemy, himself, and then his worst fear.
Inside the castle tower, Shang Tsung attempts to goad Sonya into fighting him, falsely claiming that her refusal to accept will result in the Earthrealm forfeiting the tournament. All seems lost until Kitana, Liu, and Cage, disguised as Tsung’s Shadow Priests, appear on the scene. Kitana berates Tsung for his treachery to the Outworld emperor, claiming that his arrogance and greed will cost him the tournament if he doesn’t honor his deal. As Cage frees Sonya, Tsung challenges him to final combat but is counter-challenged by Liu. During the lengthy battle, Liu faces not only Tsung but the souls that Tsung had forcibly taken in past tournaments. In a last-ditch attempt to take advantage, Tsung morphs into Liu’s deceased brother Chan. Seeing through the charade, Liu renews his determination and ultimately fires an energy bolt at the sorcerer, knocking him off a ledge and fatally impaling him on a spike bed. Tsung’s death releases all of the captive souls, including Chan’s. Before ascending to the afterlife, Chan tells Liu that he will remain with him in spirit until they are once again reunited. The fighters return to Earthrealm, where a victory celebration is taking place at the Shaolin temple, but the jubilation halts when a giant figure suddenly appears in the roiling and darkened sky; the Emperor has come for everyone’s souls. Rayden declares “I don’t think so,” and the warriors take up fighting stances.