We open to Charlie (Hugh Jackman) driving through the country to a nice mellow song, pulling up a trailer to a county fair. He's scheduled to fight his old robot, Ambush, against an 800 pound bull. The ring leader rigs the fight, however, and uses a 2,000 fighting bull instead of the agreed-upon matchup. Charlie and Ambush still holds their own, however, until Charlie gets distracted with a girl in the stands. The bull takes it opportunity and hits the bot from behind, severing it's leg. Ambush gets up on one leg, hoping to hop to a victory, but the broken bot is no match for the bull.
Charlie bet more money than he had on the fight, and leaves town before they come to collect the debt. Meanwhile, his son, Max (Dakota Goyo), who was in the full custody of his Mother, loses his mom and, based on Texas state law, must be turned over to the father, Charlie. His aunt offers to take custody, and Charlie blackmails her rich husband for $100,000 to sign the papers. He gets half up-front, and uses the money to buy an old first generation champion bot, Noisy Boy. With the help of Max and Bailey (Evangeline Lilly), his old love and the daughter of the man who coached his human boxing career years earlier, he gets it to obey his commands. However, due to his enthusiasm and excitement, he doesn't take the time to properly train and prepare with the new bot, and immediately takes it to a fight. The bot's reputation gets it into the top fight against Midas, but Charlie's inexperience and showboating costs him the fight, losing not only the money, but the famous bot.
After his last bot becomes trashed, Charlie takes Max to the junkyard to scour parts to try and fix up one of the old bots. After a dangerous fall, Max finds a buried robot, but Charlie doesn't see the potential. Charlie says that he'll consider it if Max digs it up, so Max stays through the night to recover the bot. After getting it to the gym, they reboot it and find out it has a rare Shadow Function, but that is the only piece of value Charlie sees, while Max sees an amazing machine. The bot was "Generation II, barely", and it was built as a sparring bot for higher-class bots. It was designed to take a heavy beating, and mimic moves of other bots to help train the fighters, but was never designed to fight itself. After failing to get a loan from an old friend, Max finally convinces Charlie to give the robot a shot in a fight. He stays up all night teaching it basic, inexperienced fighting moves with the shadow function. He even develops a sort of a friendship with the robot, who he discovered while cleaning the bot off that it's name is Atom.
Charlie takes it to the Zoo, an underground, lower-class ring for unofficial fights with no rules in the remains of an abandoned animal park. Against Charlie's wishes, Max bets large against the ring-leader. Max, with the advice of Charlie, comes out with an underdog victory. Taking the money and the momentem, they schedule another fight. Charlie sees Max dancing, with the robot mimicking the dance with his shadow function. Max knows that he doesn't have the fight knowledge to teach it to fight well. Charlie says that the dancing can be their "flair", and that he'll agree to teach it to fight if Max is the showman and mechanic. Max takes the speech function from Noisy Boy and lets Charlie do his thing. With the bot's superior durability and speed, combined with it's shadow function mimicking Charlie's human-boxing, Atom becomes a rising star. Max uses his winnings to buy spare parts and repairs Atom, and Charlie slowly starts paying off old debts.
It's not long before Max, Charlie, and Atom are recognized by professional promoters and invited to take part in the WRB, Worldwide Robot Boxing. They are pitted in a match against Twin Cities, an Asian robot with two heads and users. After being beaten into a corner, Charlie finds Twin Cities' weakness, and during the confusion between it's controllers, Atom lays the beat down. After a grueling, metal-on-metal slugfest, Atom finally is announced the victor. When entering the ring as the champion, Max grabs the microphone and publically challenges Zeus to a duel.
Zeus is the leading champion, undefeated in robot boxing. In fact, it's remained on the top by annihilating each and every opponent. No opposing bot has even lasted two whole rounds with Zeus. This champion bot was constructed by the champion bot maker, the once retired creator who built the Generation I champion Noisy Boy. It was commissioned by a rich Russian Oligarch to be the best fighter out there, and using a new program that analyzes fighting patterns in other bots and overrides them, it's the best there is.
It's not all good news for Max and Charlie. Charlie's old debt from the county fair catches up with him after the fight with Twin Cities. After a failed escape attempt, the goons catch Charlie and Max. They have no qualms about beating an eleven year old kid and stealing his money, but they take it a bit further when they beat Charlie "within an inch of his life". Charlie sees the danger in the lifestyle, and calls Max's aunt to take him to save him from the danger. After an emotional scene where Max reveals that all he ever wanted was for Charlie to fight for him, the aunt and uncle take custody. After a little thinking time, Charlie realizes what he should do for Max, getting the approval for the fight against Zeus.
He shows up on the aunt's doorstep, and awkwardly apologizes to Max. Although she disagrees, she decides that Charlie can have Max for "one night". They go to the championship fight, underdog against undefeated world champion. Bets are running wild with the fight, with 5 to 1 odds against Atom even surviving one of five rounds against Zeus. When the fight starts, Atom is almost instantly KO'd by Zeus. Charlie abandons the automated commands and goes for individual moves, and manages to hang in a little longer with Zeus. Atom is getting beat hard by Zeus still, though, but reaches the end of round one. In round two, Atom makes a few surprise hits against Zeus, and knocks it's automatic sensors out of balance. Charlie gets in the grove with the bot and both Atom and Zeus are taking heavy hits. Atom has lasted longer than any bot before against Zeus, credited to not only his excellent durability built in as a sparring bot but his non-standard moves taught to him by a human fighter, Charlie.
Near the end of round four, Atom gets trapped in a corner and his voice recognition software gets destroyed. With the advantage, Zeus gets ready to end it, and only misses striking the final blow because of the ending bell. Max convinces Charlie to fight with the shadow function, and even with the severe damage, the enhanced speed and improbability of shadowing a real human in real time gives Atom a new decided advantage. Charlie and Atom strike back, hard. Dealing blow after blow directly to Zeus, his creator gets frustrated, aborts the automatic program and manually controls the bot. With Charlie abusing the shadow function, however, it is all for naught.
Charlie starts taking Zeus down for the championship, and is stopped by the bell, ending the fifth and final round. Against the popular vote of the crowd, the judges vote in favor of Zeus, so he retains the crown, but Charlie and Max's bot Atom gets the honorary title of "People's Champion".