The abrupt destruction of Tokyo on July 16, 1988, began the third world war. On artificial islands in Tokyo Bay, the metropolis has been reconstructed as Neo-Tokyo. Corruption, anti-government protests, terrorism, chuff, and gang violence plague the city in 2019, prompting martial law to keep the calm. Shtar Kaneda leads his vigilante bszoku group, the Capsules, against their rival biker gang, the Clowns, during a violent demonstration. Tetsuo Shima, Kaneda’s best friend, unexpectedly collides with Takashi, an ESPer who escaped from a government laboratory with the help of a rebel group. Colonel Shikishima of the Japan Self-Defense Forces recaptures Takashi, takes Tetsuo away, and arrests the Capsules with the help of fellow ESPer Masaru. Kaneda meets Kei, a resistance activist, while being interviewed by the police, and convinces the authorities to release her with his group. Kei is forgiven, but the Capsules are sentenced to a reform school.
Shikishima and his head of research, Doctor nishi, discover that Tetsuo possesses extraordinary psychic talents akin to Akira, the ESPer who caused the singularity that destroyed Tokyo in 1988, at a secret government facility. ESPer Kiyoko tells Shikishima of Neo-oncoming Tokyo’s catastrophe, but the city council dismisses the Colonel’s worries, prompting him to consider killing Tetsuo in order to avoid another disaster. Meanwhile, Tetsuo breaks out of the hospital, steals Kaneda’s motorcycle, and plans to flee Neo-Tokyo with his girlfriend Kaori, but the Clowns ambush them. Tetsuo and Kaori are saved by the Capsules, but Tetsuo develops severe headaches and hallucinations and is transported back to the hospital.
Kaneda joins Kei’s resistance cell after overhearing their plot to rescue Tetsuo and the other ESPers. The ESPers attempt to assassinate Tetsuo through hallucinations at the hospital, but their plan is foiled. Tetsuo discovers his telekinetic skills and goes on a rampage in search of the ESPers, killing any orderlies or militiamen who stand in his way. Kiyoko lures Kei and Kaneda into the ESPers’ failed attempts to thwart Tetsuo as the resistance group infiltrates the hospital. Kiyoko informs Tetsuo that Akira, who is kept in cryonic storage beneath the Olympic Stadium’s construction site, may be able to assist Tetsuo with his abilities. Tetsuo departs the hospital after rejecting everyone around him, notably Kaneda, and begins his search for Akira.
Kei, who was employed by Kiyoko to stop Tetsuo, frees her and Kaneda from military captivity after they skipped reform school. Colonel Shikishima leads a coup against Neo-government Tokyo’s and orders all of the country’s military forces to kill Tetsuo at any costs. Tetsuo confronts gangmates Yamagata and Kaisuke over Kaneda’s bike in the Capsules’ previous hangout Harukiya Bar, and kills Yamagata after his protest. While Takashi takes Kei away, Kaisuke tells the news to Kaneda, who vows to avenge his friend. Cultists mistake Tetsuo for Akira, and he goes on a rampage around Neo-Tokyo, eventually landing at Akira’s cryogenic storage dewar beneath the stadium. Kei beats Tetsuo and exhumes Akira, only to discover that his remains have been preserved in jars for scientific research.
Kaneda confronts Tetsuo and fires a laser weapon at him, but he is unable to stop him. The Colonel fires an orbital weapon at Tetsuo, causing his arm to be destroyed, but Tetsuo disables the weapon before it can fire again. Tetsuo, now with a robotic arm, is in excruciating pain and losing control of his abilities as the Colonel and Kaori approach the stadium. Tetsuo denies Kaori’s promise to return him to the hospital, heal his injuries, and help him control his talents, which the Colonel offers. Tetsuo, weakened by the lost arm, mutates into a massive mass of flesh, enveloping Kaneda and murdering Kaori once more. As the mass swells, the ESPers bring Akira back to life in order to stop it. Akira creates a singularity, dragging Tetsuo and Kaneda into another reality after temporarily reconciling with his pals after his resurrection. As the singularity destroys Neo-Tokyo in a replica of Tokyo’s prior devastation, the ESPers transport the Colonel to a safe distance. They agree to save Kaneda despite the fact that they will be unable to return to this dimension as a result of their actions.
Kaneda goes over Tetsuo’s and the ESPers’ childhoods in the singularity, including his and Tetsuo’s relationship and the ESPers’ psychic training prior to Tokyo’s destruction. Kaneda is returned to Neo-Tokyo by the ESPers, who inform him that Akira will transport Tetsuo to safety and that Kei is developing psychic abilities. Doctor Nishi is crushed in his disintegrating laboratory after witnessing the birth of a world. The singularity vanishes after devouring Neo-Tokyo, and water floods the crater left in its wake. Kaneda discovers that Kei and Kaisuke have survived the loss of Tetsuo, and they ride off into the ruins while the Colonel watches the sunrise. Tetsuo introduces himself on another plane of life at the end of the film.