Bruce Banner (Edward Norton) is a scientist working to find a way to use gamma radiation to increase healing time in soldiers. One of his co-workers is Betty Ross (Liv Tyler), whose father, General Thaddeus "Thunderbolt" Ross (William Hurt), oversees the project. Upon subjecting himself to a gamma test, Banner transforms into a green-skinned, superhumanly powerful creature. He destroys the lab, injures Betty and Ross and escapes.
Several years later, he surfaces in Brazil, working at a local soft drink factory and living in a run-down favela. He trains with martial artists on how to control his gamma-irradiated anger, and communicates via encrypted e-mail with a man know as Mr. Blue about developing a cure. Ross has continued to search for him, believing that Banner is effectively the property of the United States government. Thanks to an accident at the factory where his blood drips into a bottle of soda and poisons a man in America (Stan Lee in a cameo), Ross tracks Banner to Brazil. He assembles a strike force led by a ruthless British soldier, Emil Blonsky (Tim Roth) and sends them after Banner. They chase Banner through the city and into the soft drink factory. Banner is also pursued by several hooligans who dislike him. When the hooligans attack Banner, he loses control of his anger and transforms into his green alter ego just as the strike team arrives. He makes quick work of the hooligans and strike team, then leaps his way out of Brazil.
Blonsky demands that Ross tell him the truth about Banner. Ross reveals that the goal of the program was not to develop new ways of treating injuries but to create an army of invincible super soldiers. Blonsky is intrigued and, recognizing that he is at the end of his career at age 39, asks to be given the super soldier formula himself. Ross agrees and Blonsky undergoes an extremely painful procedure.
Banner returns to the United States, in particular to a college town in Virginia. Betty still teaches there. Banner sneaks into a computer laboratory and downloads vital information about the experiments and his own physiognomy. That night, Betty and her new boyfriend, Leonard Samson (Ty Burrell) see Banner in a restaurant. Betty takes Banner home, but Samson contacts Ross. Banner plans to leave the next day but Ross' forces attack him on campus. Banner transforms again, and witnesses to the battle dub him "the Hulk." During the fight, Blonsky confronts Hulk and displays superhuman reflexes, but Hulk kicks Blonsky into a tree, shattering every bone in his body. Betty is nearly killed in a helicopter assault. Hulk rescues her and takes her to safety. During a rain storm, Hulk becomes scared of the thunder and hurls rocks at it. Betty calms him down. The next morning, she checks them into a motel and buys him new clothes. They decide to go to New York and meet Mr. Blue. On the way, Betty suggests that some of Banner's personality remains when he is in Hulk form, but Banner angrily rejects this notion. He wants to be rid of the Hulk, not find a way to control it.
Ross is pleasantly surprised to see Blonsky has completely healed from his grievous injuries. However, he doesn't notice the bony spines beginning to protrude from Blonsky's back.
Mr. Blue is really Samuel Sterns (Tim Blake Nelson), a professor at a college in New York City. He reveals to Banner that he has a procedure that might suppress the Hulk reaction but may not be potent enough to cure him. However, he wants to continue to study Banner so they can find a way to use his blood to cure countless diseases. Banner refuses to allow that, but agrees to undergo Sterns' suppression procedure. It seems to work. However, Ross has tracked Banner to Sterns' office. This time, Banner is successfully captured. Betty tells Ross that she no longer considers him her father. Blonsky confronts Sterns and asks to be exposed to Banner's irradiated blood. Sterns warns him that the result could be "an abomination" but Blonsky insists. The result: Blonsky turns into an enormous, scaly Abomination. He leaps from Sterns' laboratory. In the chaos, some of Banner's blood drips into an open wound on his forehead. His head begins to mutate.
Insane with power, Blonsky goes on a rampage in Harlem. In the helicopter taking them to custody, Banner, Betty and Ross see television footage of the destruction. Banner believes he can now control the Hulk. He leaps from the helicopter and transforms into the Hulk just before he hits the ground. He and Abomination wage a fierce battle. Abomination knocks the helicopter with Ross and Betty in it from the sky. Just as Abomination is about to kill them, Hulk stops him and nearly strangles Abomination to death with heavy chains. Betty's horrified reaction keeps Hulk from actually killing Abomination, however. Instead, he leaps away, eventually winding up in British Columbia. Weeks of meditation help Banner finally gain control of his alter ego.
Ross sits in a bar, smoking his trademark cigars and drinking himself into a stupor. Billionaire industrialist Tony Stark (Robert Downey, Jr.) enters and suggests that a team he is putting together just might help Ross solve his Hulk problem.