The story opens in 1986, in the Cold War Soviet Union. British secret agent James Bond (Pierce Brosnan) and his fellow 00 agent, Alec Trevelyan (Sean Bean), have infiltrated a secret Soviet chemical weapons production facility with the intention of destroying it. After finding their target, a large room filled with chemical canisters, James begins to plant explosive charges while Alec holds off the facility's guards. Alec is captured by the ruthless General Arkady Grigorovich Ourumov (Gottfried John), who orders Bond to surrender. Bond resets the charge timers from six minutes to three and walks out to surrender just as Ourumov seemingly executes Trevelyan with a bullet to the head. Bond takes cover behind a cart of chemical canisters and moves toward a conveyor belt that leads outside. A soldier with an itchy trigger finger is shot dead by Ourumov when he shoots at Bond. Bond is able to escape on the conveyor belt and shoots out the locks holding hundreds of other canisters which temporarily bury Ourumov's men. Outside the facility, Bond, using a motorcycle, leaps after a plane that falls off a nearby cliff. He successfully regains control of the plane and flies off as the weapons plant explodes.
Nine years later Bond is driving in the mountains near Monaco with a female psychiatrist from MI6 who is assigned to evaluate his mental state. He races down a mountain road, just as another woman, Xenia Onatopp (Famke Janssen), pulls up alongside him in a red Ferrari. A somewhat dangerous driving game ensues between Bond and Xenia, which ends when Bond's psychiatrist demands that he halt the game. Bond does and seduces her.
Bonds current assignment is to observe possible subversive Russian involvement from the Janus crime syndicate in the demonstration of a French hi-tech helicopter called the Eurocopter Tiger, which is unaffected by electromagnetic pulses from nuclear weapons. He is ordered to follow the same woman he raced with earlier, Xenia Onatopp, a Russian helicopter pilot. Xenia has been the mistress of a Canadian Air Force captain. That night, while on the guy's private yacht, she kills in the middle of having sex with him, by crushing his chest between her thighs, while an accomplice steals the admiral's ID. The next morning, Bond searches the yacht and finds the body. He rushes to the site of the Tiger demonstration. As he arrives, Xenia and her accomplice kill the test pilots and steal their uniforms and helmets, then climb into the Tiger. Bond is arrested and watches helplessly as Xenia flies away.
In the wastes of Siberia, at Severnaya, a Russian satellite communications outpost, General Ourumov and Onatopp arrive in the Tiger helicopter, ostensibly for a surprise inspection of the a new satellite weapons system called "Goldeneye." Ourumov orders the commanding officer to hand over the activation keys and control disk for Goldeneye and promptly has Onatopp machine-gun everyone working at the facility to leave no witnesses (while she's using the weapon, she shows signs of sexual excitement). Onatopp and Ourumov then activate one of the two Goldeneye satellites, one which contains a powerful nuclear warhead capable of delivering an electromagnetic pulse (EMP) over Severnaya. Unknown, however, to Onatopp and Ourumov, one of the technicians, Natalya Simonova (Izabella Scorupco), was out of the room getting coffee when the others were murdered and is hiding in the kitchen cupboard. Natalya manages to avoid being detected when Xenia enters the kitchen searching for her.
Ourumov and Onatopp escape in the Eurocopter, it being unaffected by the EMP. Three Russian MiGs dispatched to the scene are destroyed; two crash into each other when the electronic components within them are disrupted by the EMP. The last loses power and crashes directly into the huge satellite of the facility, causing the antenna stalk to plunge into the ground. Natalya survives the destruction of the command center and is able to climb out of the underground portion on the antenna stalk.
At MI:6 headquarters, in a high-tech observation room, Bond talks with Tanner, a specialist, who tells him they found the missing Eurocopter at Severnaya by satellite imagery. They also witness the total disruption of images in the region resulting from the EMP. Bond spots a survivor crawling away, Natalya, and reports to his superior, M. Following a brief and tense conversation where she senses Bond doesn't trust her judgment and she tells him he is a "sexist, misogynist dinosaur" and a "relic of the Cold War", she orders him to fly to St. Petersburg to investigate the connections between the Goldeneye weapons system, Ourumov and a mysterious Russian crime syndicate known only as Janus. She also warns him to complete his mission and not be guided by his desire for revenge on Ourumov for Trevelyan's death. Bond drops by Q's lab and is given a wristwatch with a laser, a belt loaded with a cable that can support his weight and an exploding ballpoint pen.
Ourumov meets with Russia's Defense Minister, Dmitri Mishkin, and declares that he is resigning his post in light of the disaster at Severnaya, which he "blames" on separatist nationals. Mishkin is displeased and questions why Ourumov has jumped to such a conclusion given that there was not only one survivor in the disaster, but two. Besides Natalya, another survivor, Boris Grishenko (Alan Cumming), a brilliant computer programmer and hacker, had actually escaped with Ourumov and Xenia and was listed as missing, however, they had not counted on Natalya's surviving the blast. Boris summons her to a chapel via email and she goes there, promptly being captured by Boris and Onatopp.
Bond arrives in St. Petersburg and meets his CIA contact, Jack Wade (Joe Don Baker). Wade agrees to take Bond to the hideout of a Russian gangster, Valentin Zukovsky (Robbie Coltrane), whom Bond had shot in the leg and given a permanent limp years before (Bond had also stolen Zukovsky's woman.) Zhukovsky is the only connection Bond has to meeting the leader of Janus. Zukovsky is still quite bitter about his wounded leg, nearly shooting Bond but agrees to aid Bond when the agent offers him a bribe of money and explosives. Zukovsky also gives Bond a bit of history about Janus' leader; the man is allegedly the child of Lienz Cossack parents whose tribe had collaborated with the Nazis during World War II and were given refuge by the English government. However, they were betrayed by England and remanded back to USSR where they were all executed under orders from Stalin.
At his hotel's pool and steam room, Bond meets Xenia herself, his lead to Janus. The two fight, with the combat being sexually exciting to Xenia. Bond refuses to be seduced or injured and, pointing his gun at her, orders her to take him to Janus. They arrive at a graveyard of sorts, full of statues of Soviet-era Russian leaders.
Bond knocks Xenia unconscious and walks out into the graveyard to meet Janus. He hears several odd noises, putting him on edge, prompting him to draw his pistol. Much to his shock, "Janus" is Alec Trevelyan, alive and well, although the right side of his face is scarred from the explosives at the weapons facility. Alec explains his origin to Bond; his parents escaped Stalin's execution of their people and fled to England, where Alec was born. After chiding Bond about his loyalty to the mission, England and not to his friend during the Soviet mission years before, Alec has Bond knocked out with a tranquilizer dart to the neck.
Bond wakes up in the pilot's seat of the Eurocopter, which has been programmed to fire its rockets at itself. In the backseat is Natalya. Bond is able to hit the emergency eject button with his head and the two are propelled away from the blast. Bond frees them both and they are almost immediately arrested by Russian police and both are taken to a holding center.
While waiting to be questioned, Bond tells Natalya that he knows who she is, recognizing that her watch is permanently stopped, a sign of the EMP that destroyed Severnaya. She tells him she knows little else besides Ourumov's theft of the Goldeneye control disk and that Boris is working with the general. Minister Mishkin walks in the room and threatens Bond with execution for espionage; Bond counters with accusations of treason by Ourumov. Natalya admonishes them both and answers Mishkin's question as to why Ourumov would steal Goldeneye. Natalya tells him that there is a second satellite with a nuclear weapon. Ourumov suddenly bursts into the room and protests that Mishkin is interfering with his own investigation. Ourumov seizes Bonds Walther PPK and kills a guard and Mishkin, intending to frame Bond. Bond is able to subdue Ourumov and a few guards and he and Simonova escape into the archives. Bond escapes after Natalya is captured by Ourumov. Bond steals a Russian tank and chases after them.
Bond finally tracks them to a train yard where Ourumov and Natalya board a large, black train that serves as Trevelyan's mobile HQ. Further down the tracks, Bond is able to derail the train with the tank and confronts Trevelyan, holding he and Onatopp at gunpoint. Trevelyan summons Ourumov into the room with Natalya whom he holds hostage. Causing a minor distraction by telling Ourumov of Trevelyan's Cossack heritage, he is able to shoot Ourumov but Trevelyan and Xenia escape. Trevelyan locks the train remotely, trapping Bond and Natalya inside, and tells Bond that he's planted explosives on the train with timers set for the same six minutes Bond gave him years before (in actuality, three minutes). Using the laser in his wristwatch, Bond cuts through the floor while Natalya, on a computer console, finds Boris Grishenko's location in Cuba. The two escape the train before it explodes.
The two travel to Cuba and meet Jack Wade, who gives Bond a plane. Bond and Natalya spend a romantic night together, Natalya remarking on how cold Bond's nature is. Bond counters saying that he must kill his old friend to stop him. The two fly over the approximate location where Natalya had traced Boris, a seemingly idyllic lake. A missile fired from under the water cripples their plane and they crash in the jungle. At the crash site, Onatopp rappels down from a chopper and attacks Bond. Bond is able to shoot the chopper down, pulling her into a tree and crushing her ribcage. Bond and Natalya discover that the lake really hides a giant satellite dish embedded in the earth. Alec and Boris have activated the second satellite's nuclear bomb and have programmed it to explode over London; Alec's plan is one of revenge against England's betrayal of his Cossack heritage; the EMP will destroy every computer system causing nationwide chaos. The blast will also erase all financial records, but not before Alec has had Boris break into the Bank of London and loot billions of pounds.
Bond and Natalya make their way inside; Bond places explosive charges near fuel pipes and Natalya finds a computer terminal to block Boris' programming of the Goldeneye satellite.A brief gunfight ensues and the fuel pipes are punctured, causing the flammable fluid to begin pooling nearby Alec's and Boris' command terminal. Bond is captured, as is Natalya, and both are brought to Trevelyan, who quickly and easily disarms the bombs Bond planted. Boris discovers that Natalya has changed his access codes for the satellite and Trevelyan threatens to kill Bond if Natalya doesn't undo her work. Having picked up Bond's grenade pen, Boris begins playing with it, pressing the button and activating the charge. Bond knocks the grenade into the pool of leaking fuel where it explodes, causing a fire which threatens the entire facility. Alec orders Boris to regain control of the satellite. Trevelyan races off to find Bond and chases him to the satellite dish's large antenna while Natalya takes control of a helicopter and its pilot. On the antenna, Bond and Alec battle hand-to-hand. During the fight, Bond is able to block the gearing mechanism controlling positioning of the antenna, which prevents Boris from regaining control of the nuke in orbit. It subsequently burns up and the facility explodes. Boris appears to survive and declares himself invincible when a shower of liquid nitrogen freezes him instantly, killing him.
Still fighting hand-to-hand, Bond and Alec find themselves at the bottom stalk of the antenna, hundreds of feet above the dish. The fight ends with Bond throwing Alec over the side, holding onto his former friend's boot. Alec asks if Bond intends to drop him "For England, James?" Bond replies "No. For me." and lets go. Alec plummets to the bottom of the dish and is still alive. Bond leaps to safety from the disintegrating antenna onto the helicopter Natalya has commandeered and flies off just as the antenna collapses, landing directly on Alec. The pilot leaves them in a nearby field where they are met by Jack Wade and a small unit of U.S. Marines.