For fifty-six years, time has literally stood still for Ellen Ripley; she has been in a stasis field, an area in space where time has stopped. She has not aged, nor has she experienced the passing of time. When she is rescued and de-briefed, her employers, the Weyland-Yutani Corporation, have difficulty believing her story; she tells them that her entire crew was killed by an alien who also destroyed her vessel, the Nostromo, rendering her unable to return home. She is viewed with suspicion and her pilot license taken away.
Ripley says that she encountered the alien on an exo-moon known as LV-426, which is now an orbiting satellite that mimics Earth. It is known as Hadley's Hope. Contact is suddenly lost with the colony and so Carter Burke and Colonial Marine Lieutenant Gorman ask Ripley to investigate the cause of this. Ripley suffers from post traumatic stress disorder about what happened to her on the Nostromo but she agrees to go, because Burke promises her that their objective is to kill the alien beings. They board the USS Sulaco, where she meets her fellow crew members; colonial Marines, and an android called Bishop.
A small shuttle drops the expedition on the surface of LV-426 but there is nobody there. The place is deserted and there is evidence that some kind of confrontation has occurred, but there are no bodies, or wounded, to back this up. There is a medical laboratory where they find a frightened little girl who tells them her name is Newt. She is the only survivor, and she is only alive because she was clever enough to climb into the ventilation system where the aliens couldn't find her.
Using the computer in the lab the crew locates the colonists hiding underneath the atmosphere processing station. When they arrive there they find evidence of aliens. The colonists are cocooned in the very center of the station and are now being used to incubate alien offspring. The Marines kill a chestburster which alerts the other aliens to their presence. The crew are ambushed, three killed, and two captured alive to be cocooned. This panics the most inexperienced marine, Gorman, leaving only Ripley level-headed enough to take over command. She uses the armored personally carrier to ram the aliens' nest so that she can rescue Corporal Hicks and Privates Vasquez, Hudson and Drake, although Drake is killed drawing fire away from the vehicle as the others get on board. Hicks sends the shuttle to drop down and rescue the remaining personnel but a renegade alien gets onto the dropship and kills the pilots. The dropship crashes.
Ripley learns that Burke was the one who had sent the colonists to the derelict spaceship where the Nostromo and crew had first discovered the alien eggs. He had planned on bringing alien specimens home to use as biological weapons, making himself very rich in the process. Ripley threatens to expose him for the charlatan that he is but before she can take action Bishop tells them that the power plant was damaged when the shuttle crashed into it and that the plant's cooling system will explode imminently, mimicking a thermo-nuclear weapon. Bishop crawls through the piping to reach the transmitter that will enable him to remotely pilot the Sulaco's last shuttle, thereby preventing any more deaths on board.
Ripley and Newt don't mean to fall asleep, but they cannot help it. Exhaustion overcomes them and when they wake up they find themselves locked in a small room in the laboratory with two face huggers. Ripley hits the fire alarm hoping to let the Marines know they need help. They come, and they kill the face huggers, but Ripley is enraged because she believes Burke released the face huggers from their tanks with the express purpose of having them impregnate Newt and herself, thereby avoiding any detection when he wants to bring alien embryos back to earth. She also accuses him of plotting to kill the marines so that there are no witnesses to back her up - after all, her word is still questionable where her employers are concerned. The Marines prepare to kill Burke but the power goes out before they are able. Aliens descend on them from the ceiling, giving Burke the chance to run away. He doesn't get far; he is backed into a corner by an alien. Hudson covers the others whilst they escape and is captured. Gorman and Vasquez sacrifice themselves by detonating a grenade, and the aliens capture Newt.
Ripley and a very injured Hicks manage to get back to Bishop in the dropship shuttle, but Ripley won't leave without Newt. She arms herself extensively and goes back into the processing station where Newt is being held captive in the aliens' hive. Ripley manages to free the little girl but have to destroy the alien queen's eggs and her egg chamber, which enrages the queen, who pursues them. They escape by the skin of their teeth, the station exploding behind them and the colony burning.
The queen has followed them onto the Sulaco and ambushes them. Ripley defends Newt using a cargo-loader, firing the queen back out into space. Bishop has been torn in half by the alien but Hicks seems to be making a recovery. The team enters hypersleep, ready to re-enter Earth's sphere, to go home.
