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In 1957, a large alien robot crashes from orbit near the coast of Rockwell, Maine with no memory. Shortly after, the Iron Giant wanders off into the mainland. Nine-year-old Hogarth Hughes follows a trail of the forest’s destruction and frees the robot, who is stuck in the power cables of an electrical substation. After being rescued by and befriended by Hogarth, the Giant follows him back to his house, where he lives with his widowed mother Annie. Upon their return, the Giant attempts to eat the rails off the ties of the nearby railroad tracks. Alarmed by the sound of an oncoming train, Hogarth tells the giant to repair the tracks. The Giant attempts this, but takes too long, causing the train to collide with his head. Hogarth hides the damaged robot in their barn where he discovers the robot is self repairing.

Later that night, Hogarth returns to the barn with a stack of comic books to read to the Giant. The Giant is impressed with Superman, but distressed when he discovers a comic about an evil robot; Hogarth tells the Giant that he can be “who you choose to be”. Investigating the destroyed substation, U.S. government agent Kent Mansley discovers evidence of the Giant and decides to continue his inquiries in nearby Rockwell. Finding a BB gun Hogarth left near the substation the night he found the Giant, Mansley takes up a room for rent at Hogarth’s home and trails the boy to learn more. He is paranoid about an alien invasion and alerts the U.S. Army to the possible presence of the Giant. Worried that they will get caught, Hogarth evades Mansley and takes the Giant to beatnik artist Dean McCoppin, who passes off the robot as one of his works of scrap-metal art when Mansley and Lieutenant General Guy Rogard investigate. Once Mansley and Rogard are gone, Hogarth plays with the Giant using a toy gun, but inadvertently causes the Giant to activate a defence mechanism. Dean saves Hogarth and angrily commands the Giant to leave, but Hogarth, believing the Giant never meant to harm him, gives chase. Dean sees the toy gun and realizes that the Giant was reacting defensively against the gun. He catches up with Hogarth on his motorbike and they chase after the Giant before he can reach the town.

In Rockwell, the Giant saves two boys, instantly getting on the good side of the bewildered citizen witnesses, and leading to the Giant telling Hogarth that he chooses not to be a gun. Unfortunately, the Giant is seen by the military and attacked. The Giant flees with Hogarth until he is shot down by a missile fired from an F-86. After crash-landing, the Giant thinks that the unconscious Hogarth is dead; enraged, it activates a massive arsenal of energy weapons and attacks the Army, who are no match for the Giant’s advanced firepower. Mansley lies to Rogard that the robot killed Hogarth, before telling him to lure the Giant out to sea so they can destroy it with a nuclear ballistic missile from the USS Nautilus. Hogarth wakes up and pacifies the Giant, easing him to deactivate his weapons. He then shows himself to Rogard and his men. Rogard, after listening to Dean’s explanation of the Giant and realizing that Mansley lied to him, is about to tell the Nautilus to stand down, but Mansley snatches the walkie-talkie and orders the Nautilus to launch the missile. Realizing the deadly mistake, Rogard lambastes Mansley and informs him that the missile will vapourize not only the Giant, but everyone in Rockwell as well. Mansley tries to escape Rockwell to save himself, but the Giant stops him and he is arrested by the Army. When Hogarth tells the Giant about Rockwell’s fate, the Giant flies off to intercept the missile. With a smile of satisfaction, comparing himself to Superman, the Giant collides with the missile, causing a massive explosion high up in the atmosphere. The people of the town recognize the Giant as a hero, but everyone, especially Hogarth, is deeply saddened by the Giant’s sacrifice. Some time later, Annie and Dean start a relationship and Dean builds a statue honoring the Giant. Hogarth receives a package from General Rogard, containing the only piece of the Giant they found, a small jaw bolt. That night, Hogarth awakens to a familiar beeping coming from the bolt, which is trying to get out his window. He realizes the Giant is still alive and repairing himself somewhere, and he opens the window to let the bolt out. On the Langjökull glacier in Iceland, various parts of the robot approach the snowdrift where the head rests, eyes glowing, as the Iron Giant wakes up and smiles.