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In 1989, Kevin Flynn (Jeff Bridges), an innovative software engineer and the CEO of ENCOM International, tells his seven-year-old son Sam (Owen Best) about a new "digital frontier" he has created called The Grid, a virtual domain existing inside his computer. Kevin tells Sam of the two programs helping him in his endeavor, Tron and Clu; Tron keeps The Grid secure, while Clu is tasked with creating the perfect system. One night, Kevin departs for his office to continue working on the development of his creation, when he mysteriously vanishes.



Twenty years later, Sam (Garrett Hedlund) is haunted by Kevin's disappearance. After sabotaging ENCOM's operations in order to protect his father's legacy, Sam is visited by Kevin's friend and ENCOM executive Alan Bradley (Bruce Boxleitner). Bradley had received a page originating from a supposedly disconnected phone line at Flynn's long-shuttered arcade, and he urges Sam to investigate it, convinced that doing so may lead to information regarding Kevin's whereabouts. While exploring the arcade, Sam discovers a concealed door leading to a computer laboratory in the basement. Attempting to discover what his father was doing by calling up the command logs on Kevin's computer, Sam reissues the last command entered, unintentionally activating a digitizing laser which transports him to The Grid.



Sam is captured and taken to the game arena, where he receives combat armor and an identity disc from four Sirens, the arena's armorers. When Sam attempts to escape, he is pitted against Rinzler, a master of the games. When Rinzler notices that Sam bleeds, he realizes Sam is not a program, but rather a User, and ceases his attack. Sam is taken before Clu, the de facto leader of The Grid, whom Sam initially believes is his father. Clu forces Sam into a Light Cycle match with several other programs, and Sam is nearly killed before Quorra (Olivia Wilde) rescues him, taking him to a distant hideout in an area "off-grid" (deemed the Outlands), where Sam is reunited with his father. Kevin reveals that, during The Grid's development, "isomorphic algorithms" (ISOs) manifested with the potential to unlock mysteries in almost every field of science, religion, and medicine. Clu, however, saw the ISOs as imperfect beings, and following his programming to create a perfect system, betrayed both Kevin and Tron, seized control over The Grid; then proceeded to conduct the genocide of all ISOs, systematically wiping them from existence. It is further revealed that the portal to the real world, which takes massive amounts of energy to sustain, cannot remain open indefinitely and ultimately closes; it can only be opened from the outside.



Quorra discloses that Kevin can choose to "re-integrate" with Clu at any time, but that the process would destroy them both. Sam resolves that he must make it to the portal and back to the real world, where he could delete Clu from outside of the system. Quorra tells him about a program called Zuse, who she believes may be able to provide safe passage to the portal. Using Flynn’s Light Cycle to travel back onto The Grid, Sam employs a decoy to occupy Clu's troops while he infiltrates the End of Line Club. While searching for Zuse, Sam encounters Gem (Beau Garrett), one of the Sirens from the arena, who tells him that she can lead him to the person he needs to find. At the End of Line Club, the club owner Castor (Michael Sheen) is revealed to be Zuse, but instead of assisting Sam, he turns against him and exposes him to Clu's enforcers. Kevin and Quorra arrive to rescue Sam, and Quorra is severely injured when her arm is derezzed. They escape, but not before Kevin's disc is seized by Clu's guards. Kevin, Sam and Quorra are nearly killed when the elevator they are on plummets from the the tower, but Kevin uses his administrative powers as The Grid's creator to bring the lift to a gentle stop. Clu arrives at the club, and Castor attempts to barter Kevin's disc in exchange for dominion over the city. Clu counters the proposal by simply taking the disc and destroying the club, appearing to derez Castor and Gem along with it. Stowing away on a Solar Sailer transport ship, Kevin heals Quorra, whom he reveals to be the last surviving ISO, and brings her back online. As the ship approaches the portal, Sam and Quorra have a conversation in which she expresses her desire to witness the real world, particularly the sun.



The three ultimately arrive at a station aboard a massive warship. While trying to avoid detection, the trio encounters Rinzler. Entrusting her identity disc to Kevin, Quorra attempts to sacrifice herself as a distraction so that he and Sam may safely reach the portal, but she is instead taken hostage by Rinzler. Watching Quorra's capture, Kevin sees Rinzler for the first time and immediately recognizes him as Tron, apparently reprogrammed into servitude under Clu. Meanwhile, Clu addresses his troops, revealing his plans to use Kevin's disc as a means of sending himself and his army into the real world in order to "perfect" it. Kevin is momentarily captivated by the speech, which has an eerie similarity to one he himself delivered at an ENCOM event years before. While Kevin proceeds to commandeer transport off of the warship, Sam saves Quorra and retakes Kevin's disc.



The trio board an aerial shuttle and again set out for the portal, pursued by Clu, his guards, and Rinzler using Light Jets. Between Quorra's evasive flying and Sam manning a rear turret, they manage to shoot down most of their opponents, leaving only Clu and Rinzler. As the shuttle takes damage, Rinzler makes eye contact with Kevin, rousing memories of his true identity. Declaring, "I fight for the Users," Rinzler deliberately collides with Clu's Light-Jet, causing both of their vehicles to derezz. As they plummet towards the digital Sea of Simulation below them, Clu and Rinzler engage in a mid-air scuffle during which Clu steals Rinzler's spare baton, using it to create another Light Jet and continue his pursuit. Rinzler plunges into the sea, where the red illumination on his armor suddenly changes to his original white, signifying the regaining of his identity as Tron.



As Sam, Kevin and Quorra reach the portal, their progress is hindered by Clu, who arrived before them. Clu again seizes Kevin's identity disc, but is horrified to discover that it is actually Quorra's disc. Deducing that Sam and Quorra intend to use Kevin's disc to escape, Clu tries to attack them, but is halted by Kevin, who uses his powers to hold Clu back. Realizing that there is no other option, Kevin sacrifices himself and re-integrates with Clu. The two merge and explode just as Sam and Quorra transport through the portal back to the real world.



Back in the basement of Flynn's arcade, Sam saves the data from his father's disc on a flash drive and meets Alan upstairs. Sam tells Alan that he will start working at ENCOM on Monday, and as the controlling interest shareholder of ENCOM, he will name Alan chairman of the board. Sam finds Quorra outside, and she inquires as to what they will do now. Sam takes her on a ride on his motorcycle, showing her the real world she had longed to see, as the sun rises.