Following a nuclear test in French Polynesia back between the 1940s and 1950s, the fallout irradiates a lizard's nest. Decades later, an enormous sea creature suddenly attacks a Japanese fishing vessel in the South Pacific, leaving only one fisherman alive. Dr. Niko Tatopoulos, an NRC biologist, is sent to Tahiti and to Jamaica, where a wrecked village, footprints, and ship are found. Nick collects skin samples that lead him to believe the creature is an enormous mutant created by nuclear testing. It travels to New York City during the rainiest week of the season, leaving a path of destruction in its wake.
The city is evacuated before the military attempts to kill it but fails in an initial attempt. Nick later collects a blood sample, and after performing a pregnancy test, discovers that the creature reproduces asexually and is collecting food for its offspring. Aspiring journalist and ex-girlfriend of Nick's, Audrey Timmonds, uncovers a tape in his possession containing classified information about the creature. However, her superior, Charles Caiman, appropriates the tape as his own and broadcasts it on television, revealing the creature's nuclear origins in French Polynesia and its name, spoken by the surviving fisherman as "Gojira", which Caiman jumbles up as Godzilla. With the classified information now released, Nick is removed from the operation, and abandons Audrey. Soon, he is kidnapped by Philippe Roaché, an "insurance guy" he met before coming to Manhattan. Revealing himself as an agent of the French secret service, Philippe and his colleagues have been keeping close watch on the events and plan to cover up their country's role in the nuclear testing that spawned Godzilla. Suspecting a nest somewhere in the city, they cooperate with Nick to trace and destroy it.
Following a second military attempt to kill Godzilla, the creature dives into the Hudson River to escape. Attacked by US Navy submarines, including USS Utah (SSBN-745), it sinks to the river bed, presumably killed. Meanwhile, Nick and Philippe's strike team, followed by Audrey and her cameraman Victor Palotti, find the nest inside Madison Square and locate over 200 eggs. Before the French can succeed in destroying them, the eggs suddenly hatch and the offspring attack the strike team, killing most of them. Nick, Animal, Audrey and Philippe take refuge in the Garden's broadcast booth and send out a live news-report to alert the military of what will happen if the offspring escape. A prompt response involving an airstrike is initiated as the four escape moments before Air Force jets bomb the arena. Audrey and Nick reunite, before the adult Godzilla, however, having survived, emerges from the Garden's ruins. It chases the four across Manhattan, believing them responsible for the deaths of its young. After a taxi chase, they manage to trap Godzilla within the Brooklyn Bridge where the returning Air Force jets manage to shoot it down. Godzilla dies from its wounds, while the remaining citizens celebrate. Audrey tells Caiman that she quits working for him after what he did, before leaving with Nick. Philippe (taking a tape that Animal was recording and promising to return it after "removing a few items from it") thanks Nick for his help and parts ways.
Meanwhile, back at the ruins of Madison Square Garden, a single surviving egg hatches.