During Underground construction in London around the year 2008, a huge, hibernating dragon is discovered and springs to life, instantly incinerating all construction workers with its fiery breath. The only survivor is the 12-year-old Quinn Abercromby (Ben Thornton), whose mother (Alice Krige) was chief of the construction crew. The dragon escapes, and soon thousands of them work their way through Europe and eventually the rest of the world, burning everything, feeding on the ashes, and multiplying at an exponential rate. The world powers use their most powerful weapons, but this only hastens the destruction of the planet.
In 2020, the adult Quinn (played by Christian Bale) runs a medieval stone castle in Northumberland, a lonely bastion of mankind, afraid of the sky and the dragons that could attack any time. Their hope is to outlast the dragons, wait until they die out again (as they presumably did several times before) and go into hibernation. Unfortunately, the people are beginning to starve while waiting for their crops to ripen.
One day, a team of American dragon-slayers arrive, led by Denton Van Zan (Matthew McConaughey) and bringing a Chieftain tank and an Agusta A109 helicopter, piloted by Alex (Izabella Scorupco). Mistrusting, but needing each other, the two leaders Quinn and Van Zan work together and eventually manage to kill the dragon that destroyed the crop. The inhabitants of the castle celebrate the victory, only to be chastised by Van Zan, who is disgusted by their behaviour, having lost three of his team in the battle.
Afterwards Van Zan and Alex tells Quinn that all dragons his unit have encountered so far are female. Their theory is that they are like fish, the females would lay their eggs, then the male would come and fertilize them, leaving them with the concept that there is only a single male within the whole dragon population world-wide.
Van Zan and his unit go to London to find the single male dragon, and discover a road block. Van Zan then sends Alex to find a new way around. The male dragon soon arrives and annihilates nearly the entire army. The male dragon follows their route back to the castle and destroys it. The castle inhabitants are however saved by hiding in an underground shelter that is designed to survive the intense heat, but Quinn's dear friend, Creedy, is killed, as he tries to go save more people in the castle.
Defeated, Van Zan returns to the castle, rescuing Quinn and the surviving children from the castle's cellar. Quinn tells Van Zan that they and Alex will hunt the male dragon in London. They use the helicopter to follow the coastline to the city, unnoticed, where they learn that the dragons are beginning to starve and are resorting to cannibalism. Denton's plan is to fire an explosive charge, placed on a crossbow, into the dragon's mouth during the brief moment it inhales, drawing air to produce fire. During the battle, Van Zan is unable to destroy the dragon using his crossbow and attack the dragon with no more than his axe in a head on leap. He is killed when the dragon swallows him in mid-air. Quinn and Alex are able to lure the dragon to street level and Quinn destroys it with his own crossbow.
At least three months after the male dragon is slain, Quinn and Alex are seen erecting a radio tower and receive a transmission from another group of survivors in France.