In the year 1973, the most recent underground nuclear test, set off near the Aleutians, sends shockwaves as far south as Monster Island, disturbing the monsters, causing Anguirus to fall into a fault opened up by the consequential earthquakes and Rodan to fly off, while Godzilla decides to stay put.
For years, Seatopia, an undersea civilization, has been heavily affected by this nuclear testing conducted by the surface nations of the world. Upset by these tests, the Seatopians plan to unleash their civilization's beetle-like god, Megalon, to destroy the surface world out of vengeance.
On the surface, an inventor named Goro Ibuki, his nephew Rokuro and their friend Hiroshi Jinkawa are off on an outing near a lake when Seatopia makes itself known to the Earth by drying up the lake the trio was relaxing nearby and using it as a base of operation. As they return home they are ambushed by agents of Seatopia who are trying to steal Jet Jaguar, a humanoid robot under construction by the trio of inventors. However the Agents' first attempt is botched and they are forced to flee to safety.
Some time later, Jet Jaguar is completed but the trio of inventors are knocked unconscious by the returning Seatopian agents. The agents' plan is to use Jet Jaguar to guide and direct Megalon to destroy whatever city Seatopia commands. Goro and Rokuro are sent to be killed, while Hiroshi is taken hostage. Megalon is finally released to the surface while Jet Jaguar is put under the control of the Seatopians and is used to guide Megalon to attack Tokyo with the Japan Self Defense Forces failing to defeat the monster. Eventually, the trio of heroes manage to escape their situation with the Seatopians and reunite to devise a plan to send Jet Jaguar to get Godzilla's help using Jet Jaguar's secondary control system.
After uniting with Japan's Defense Force, Goro manages to regain control of Jet Jaguar and sends the robot to Monster Island to bring Godzilla to fight Megalon. Without a guide to control its actions, Megalon flails around relentlessly and aimlessly fighting with the Defense Force and destroying the outskirts of Tokyo. The Seatopians learn of Jet Jaguar's turn and thus send out a distress call to the Nebula M aliens to send Gigan to assist them.
As Godzilla journeys to fight Megalon, Jet Jaguar programs into a safeguard mode and grows to gigantic proportions to face Megalon itself until Godzilla arrives. The battle is roughly at a standstill between robot and monster, until Gigan arrives and both Megalon and Gigan double team Jet Jaguar. Godzilla finally arrives to assist Jet Jaguar and the odds become evened. After a long and brutal fight, Gigan and Megalon both retreat and Godzilla and Jet Jaguar shake hands on a job well done. Godzilla returns to Monster Island, and Jet Jaguar returns to its previous, human-sized state and reunites with its inventors.