Set sometime in the distant future the intra-galactic space-colony-ship Southern Sun (which bears a strong resemblance to the Battlestar Galactica) is on a multi-generational trip to a new settlement. Tired of his fate to live and die on the ship, Kalgan (John Philip Law), the head of the Enforcers who are tasked with the ship's security, causes an explosion in the Southern Sun's docking bay just as a fighter is landing there. The decorated fighter pilot, Dave Ryder (Reb Brown) survives the crash via an emergency teleportation system, but his passenger, Professor Spooner is killed in the the crash, which causes serious damage that puts the docking bay out of commission. Ryder is taken to see the Southern Sun's commander, Alex Jansen (Cameron Mitchell), who accepts Ryder's account of events, though his daughter Lea (Cisse Cameron) flies into a rage at Ryder and accuses him of abandoning the Professor to die. Despite this less than harmonious introduction, the two quickly become friends, and it becomes clear that Lea is strongly attracted to Ryder.
Just before the docking bay accident, a group of witchcraft-practising female aliens named Bellerians are brought on-board. While they never interact with the main characters during the course of the film (aside from a brief scene in which their leader Jennera consults with Commander Jansen), it is implied that they influence the actions of the lead protagonists, and also covertly help them by seducing Enforcers, which causes Kalgan to execute them for their seeming incompetence, thinning out his own forces.
Meanwhile, Kalgan meets with his main co-conspirator MacPhearson (James Ryan), the ship's chief engineer who feels unappreciated for his part in an incident in which he prevented a major disaster, but was severely injured and left unable to walk without aid. MacPhearson informs Kalgan that it will be several weeks before any ship can land or take off from the Southern Sun, which will give Kalgan and his forces time to take over the Southern Sun and force her to land; to that end Kalgan has also enlisted the aid of space pirates from the nearby Corona Borealis system. MacPhearson then consults with his engineering crew, and all bar one of them agree to join the mutiny. The sole dissenting engineer, Parsons, accuses them of treason and threatens to report them to Commander Jansen, which results in the other engineers quickly turning on and killing Parsons.
Shortly thereafter, a maintenance engineer named Codell discovers evidence that Kalgan caused the explosion in the docking bay, and after informing a bridge officer, Lt. Lamont of this, begins making his journey to the bridge to inform Jansen. Kalgan intercepts him on the way however, and offers him a choice - join the mutiny, or be put in the "deep freeze." Codell instead chooses to commit suicide.
That night, Lea is flirting with Ryder in the ship's disco, when a pair of Enforcers arrive and ask for Lamont, who is also at the disco. She leaves the disco and is immediately shot dead by Kalgan, who leaves the scene in an electric kart. Ryder and Lea both overhear the whole thing and chase Kalgan down in another kart, eventually arriving at the "deep freeze." This turns out to be a room in which troublesome officers are stored in cryogenic suspension; when Kalgan takes over the Southern Sun they will be thawed out and given one further chance to join Kalgan's forces, or be ejected into space. Kalgan and more Enforcers then arrive, and Ryder and Lea are heavily outnumbered and forced to flee, but now have solid evidence that there is a conspiracy and that Kalgan is the ringleader.
Ryder is thusly promoted to being the ship's new security chief, just before the Southern Sun encounters the space pirates. Thanks to Ryder's leadership, the Southern Sun easily defeats the pirate ships (which look uncannily like Cylon Basestars) without taking any serious damage. Knowing that he cannot now rely on outside help, Kalgan abducts Lea and threatens to kill her if Commander Jansen does not voluntarily give up control of the Southern Sun. Not wanting to rely on Jansen giving into his demands though, Kalgan begins torturing Lea for information by using a laser-like device on her teeth. During this MacPhearson arrives and gives Kalgan a progress report, causing Lea to realise that he too is a part of the conspiracy.
Acting on his own authority, Ryder goes into the bowels of the Southern Sun and knocks out an Enforcer, taking his uniform. Lea, meanwhile, has been left under the supervision of a single security guard who she pretends to seduce, then she knocks him out and steals his uniform just as Ryder arrives. After a few more encounters with Enforcers, Ryder and Lea escape and return to the bridge. An infuriated Kalgan realises that with his main bargaining chip lost and the command crew now aware that MacPhearson is involved in the conspiracy, he has no option but to take control of the ship by force.
The mutiny begins in full, with both sides taking heavy losses - in particular, many officers fall to their deaths over the various railings dotted throughout the ship. Eventually Ryder sets off an explosion that traps most of the mutineers in that section of the Southern Sun, but both Kalgan and MacPhearson escape. MacPhearson isn't able to get very far and resorts to hiding in a gas expulsion sump. Ryder (implied to be under the influence of the Bellerians) fills the sump with methane gas which he then ignites, causing a fire which burns MacPhearson to death.
With Kalgan the only mutineer still at large, Ryder and Lea pursue him into the ship's bowels in an electric kart. Lea gets knocked out of Ryder's kart, which she then accidentally disables by shooting it in an effort to take out Kalgan, who in turn rams Lea with his own kart, causing her a slight injury. After getting his kart working again, Ryder aims it at Kalgan's kart and drives toward it at full speed, diving out of it at the last second. Kalgan is unable to dodge it, and is apparently consumed in a massive explosion.
The mutiny seemingly thwarted, Ryder and Lea apparently make preparations to get married. Later however, it turns out that Kalgan survived the explosion, ending the film on a cliffhanger.