The movie opens with a black screen and the sound of a few thundering crashes, then a roiling ocean appears followed by the title which is accompanied by Godzilla's famous roar. Steve Martin (Raymond Burr) narrates, "This is Tokyo, once a city of six million people. What has happened here was caused by a force which up until a few days ago was entirely beyond the scope of mans imagination. Tokyo, a smoldering memorial to the unknown. An unknown, which at this very moment still prevails and could at any time lash out with its terrible destruction anywhere else in the world. There were once many people here who could have told of what they saw. Now, there are only a few." Martin is pulling himself out from under rubble and tells us, "My name is Steve Martin. I'm a foreign correspondent for United World News. I was headed for an assignment in Cairo when I stopped off in Tokyo for a social call, but it turned out to be a visit to the living hell of another world." Bloody and battered, he struggles to get up but faints.
Medical workers are carrying stretchers with the injured into makeshift hospitals. Helping in the hospital is Emiko Yamane (Momoko Kochi), daughter of Dr. Yamane, a leading paleontologist. Steve is carried into one of the hospitals on a stretcher. Steve sees Emiko and calls to her. She comes over to talk to the reporter. Steve asks about her father and is told he is fine and meeting with security officials. She departs to find a doctor to attend to Steve. He begins his flashback, "It was still hard for me to believe that I could be lying here in a hospital alive. When I think of the thousands of others, dead and dying in the ruins around me. When I think back only a few days ago. I was enroute to Cairo, with a few days layover in Tokyo." Steve was planning to meet with an old college friend, Dr. Serizawa, a theoretical scientist who was gaining great recognition in the Far East for his unusual experiments.
A ship at sea is attacked by an unseen menace. It sinks, burning, but not before a radio distress signal is sent. Steve is processing in with Customs when Serizawa's assistant meets him in line to tell him Serizawa is unavailable. Another man, an official, takes Steve to a security office for questioning. The security officer, Tomo Iwanaga (Frank Iwanaga) asks Steve if, during the flight, he noticed anything unusual happen. Steve notes that everyone on the flight is being questioned and wants to know why. Steve presents his reporter's credentials but is told by Iwanaga that he doesn't think the reason should be printed. He does volunteer that a ship was sunk and the crew reported a blinding flash of light and the ocean burst into flames. Steve expresses interest in the story and is invited to a briefing with the ship owners.
A rescue ship is sent to investigate, but it is also destroyed. Steve calls his office in Chicago to report that eight ships have been destroyed so far with the same method. He informs his editor he intends to stay and report on the developing story. A few survivors, who were found, died of shock and strange burns. A meeting of security officials and top scientists was called. Dr. Yamane (Takashi Shimura) was invited. Steve had met the scientist through his association with Serizawa. Steve is present at the meeting and Iwanaga translates. Odo Island seems to be close to the disasters, so it is decided the research should start there.
On the island, wreckage washes up with a survivor, but he soon dies. The next day a helicopter is sent to Odo Island. Steve managed to get an invite. The officials want to question the natives. Steve and Tomo Iwanaga talk to a native who is very frightened and claims he saw a monster. They spend the night on the island and watch an ancient ceremony that is related to a legend, Godzilla. That evening the wind picks up and they are caught in a typhoon. The next morning officials brought some of the islanders back to the mainland to make a direct report. Each of the natives said a living creature was responsible for the damage. Dr. Yamane proposes a research party should investigate Odo Island. Steve asks Yamana for permission to be included.
The ship departs for the island. On board Emiko is talking to a young Marine officer named Ogata (Akira Takarada). Despite her engagement to Serizawa she is very friendly with Ogata. They arrive on the island and begin work. It is noticed that some areas are contaminated with radiation. Yamane notices the large footprints of a living creature and they are also radioactive. He finds a living fossil--a trilobite. A man rings an alarm bell and calls the name Godzilla. They head for the hills. Loud footsteps are heard, then above a mountain ridge the beast appears. Only the head and neck are visible. The beast roars and the islanders and scientists scatter. Emiko falls, but Ogata picks her up and they run for safety. As quickly as it appeared, Godzilla retreats back into the ocean. The crowd runs to the top of the ridge, but all they see are the creatures enormous footprints leading back to the water.
Yamane gives his report of the findings on the island. He postulates Godzilla is an intermediary between ancient land and sea creatures. A picture of the creature taken on the island shows it to be 400 feet tall. He blames H-bomb experimentation for the resurrection of the beast. Steve calls his editor, George Lawrence (an uncredited Mikel Conrad) to provide an update. Steve tells George that the military intends to use depth bombs on Godzilla. Steve next calls Serizawa (Akihiko Hirata), who is working in his laboratory. They make a date for dinner the next evening. Serizawa will be meeting with Emiko this evening.
Steve explains that Serizawa and Emiko were betrothed when they were both children. Emiko does not love the scientist, but she does have great respect for him. She is working up the courage to tell Serizawa she intends to marry Ogata. Before she can tell him her news, he insists that she witness something in the laboratory. Sarizawa drops a small tablet into a large fish tank. He applies power, and the water begins to churn and boil. Emiko screams at the sight of something happening in the tank. The pair exit the lab, Emiko still visibly upset. Serizawa swears Emiko to secrecy regarding his discovery. She returns to Ogata but tells him nothing.
The Japanese Navy drops depth charges into Tokyo Bay. Dr. Yamane, Emiko, and Ogata watch this on television. Yamane is visibly upset and leaves the room. Emiko goes to check on her father. Yamane does not want the creature killed; He wants it studied. A party boat out in Tokyo Bay spots Godzilla surface and panic ensues. The military prepares for an attack. That evening Godzilla surfaces in the bay and is met by military force. It wades ashore and destroys a train station, picking a train carriage up in its mouth. As people scatter from the menace, Steve and Tomo witness the destruction from higher ground. After a brief time, Godzilla returns to the water. The city of Tokyo is surrounded by large electricity transmission towers carrying 300,000 volts. They hope that will keep the creature out of the city. Non-essential personnel are evacuated from the city. The newspaper office is high up in a building and allows a good view of the city. Steve uses a tape recorder for his observations. That evening Godzilla again walks out of Tokyo Bay. He walks through the high voltage lines, then destroys a few of the towers. Godzilla's hot breath melts the surrounding transmission towers. They glow red hot, then soften and collapse. Again, using its hot breath, sections of the city are engulfed in flames. The creature is impervious to tank fire. Fleeing people are either burned or crushed under foot by the rampaging beast. The newspaper building is destroyed with Steve still reporting from inside. Leaving the city in flames, Godzilla returns to Tokyo Bay. Fighter Jets launch missiles at the creature, but they also have no effect.
Steve wakes in the hospital surrounded by Emiko and Ogata. She tells Steve about the terrible weapon Serizawa has invented. Emiko recounts her visit to the lab and provides details about the oxygen destroyer and the terrible effect it had on the fish. The weapon dissolves the flesh from anything it touches.
Emiko and Ogata go to see Serizawa at his home. Ogata confronts Serizawa and demands that the discovery be used on Godzilla. Serizawa refuses and he and Ogata scuffle over the formula and papers in the laboratory. Serizawa is concerned his terrible weapon may fall into the wrong hands. To assure himself it won't be misused or stolen, Serizawa destroys all his notes and insists he personally deploy the weapon.
Serizawa and Ogata dive into Tokyo Bay to place the weapon to destroy Godzilla. They find the creature prowling around and walk closer. They place the weapon and Ogata surfaces, but Serizawa remains behind and deploys the weapon. Godzilla writhes in pain as the chemical strips his flesh away. Serizawa reports the weapon is working, and then he cuts his line to the surface. Godzilla briefly surfaces and bellows his defeat, then sinks and is devoured by the chemical leaving only his skeleton.
We close with a scene of the ocean at sunset and Steve Martin reporting, "The menace was gone; so was a great man. But the whole world could wake up and live again."