In 2044, the United States has suffered economic collapse, causing severe social decay and growth in organized crime. In addition, a strange mutation has occurred in 10% of the population, giving them minor telekinetic powers, manifested by their ability to float small objects. They are referred to as TKs. Thirty years into the future in 2074, time travel is invented, but is immediately outlawed. However, because by that point tracking technology has rendered it nearly impossible to dispose of bodies secretly, crime bosses turn to time travel to send their targets to the past (the movie's present) to be killed by "loopers:" hired guns paid in silver to kill whoever is sent to them. The victims have bags over their heads, and silver bars strapped to their backs. This comes at a price: The severe sanctions on time travel means that crime bosses eventually need to end a looper's contract, and also eliminate any traces of their working relationship, so they send his older version back to be killed by his younger self, referred to as "closing the loop," which each looper must do himself. They're paid in gold for this, to live the rest of their lives in comfort.
Joseph "Joe" Simmons (Gordon-Levitt), 25, works for a mafia company in Kansas City as a looper. Joe's boss, Abe (Jeff Daniels), was sent back in time to manage the loopers and also owns a club where Joe frequents and spends time with Suzie (Perabo), a showgirl. Abe also controls the "Gat Men," his muscle, led by Kid Blue (Segan). Gat men are so named for their magnum revolvers, which have greater range and accuracy than a looper's 'blunderbuss' shotgun; a weapon designed strictly for close quarters.
While at the club one evening, another looper announces that he has just closed his loop. The big payoff in gold, is reason to party. As Joe continues his work, he and the other loopers begin to notice that loops are being closed at an increasing pace.
One night, Seth (Dano), Joe's friend and a fellow looper, visits him in a panic telling him that he was supposed to close his own loop but couldn't do it. Seth reports that his victim appeared, singing a song his mother had sung to him when he was a baby. Knowing it was his future self, Seth couldn't kill him. Old Seth tells Seth about a new crime boss called the Rainmaker, who has commenced a reign of terror in the future. The Gat Men then knock on Joe's door, so he hides Seth in his apartment floor safe. The Gat Men suspect Joe is shielding Seth, so they take him in to Abe.
Abe makes a deal with Joe. If he gives up Seth, he will walk free. If he doesn't, he can't be killed, as it will upset things in the future, but they can definitely make things difficult for him by taking half the silver he has been hoarding for his retirement in France. Joe immediately gives up Seth. Abe suggests Joe go to China instead of France. "Don't go to France. Go to China. I'm from the future. I know these things."
Old Seth attempts to climb a barb-wire fence, but notices old scars appearing on his arm, spelling out words telling him to go to an address. He ignores this, and one of his fingers disappears. Shortly after, another finger is gone. The stubs are not bloody - as if the digits were removed many years earlier. Then the tip of his nose is cut off. Old Seth returns to his car, and heads for the address he was given. Running toward it, he loses a foot, then apparently both feet, and he falls to the ground and crawls to the door. He bangs on the door, and it is opened by Kid Blue, who immediately shoots him. Behind the shooter, we can see Young Seth, alive on a table where they were chopping off his body parts, and we hear the sound of a ventilator.
Joe continues to do killings. After each killing, he visits a diner, and works on his French lessons. He is served by a waitress named Beatrix. While waiting to do one killing, he is puzzled when the victim is late. When the person does appear, he has no bag over his head. Joe recognizes Old Joe (Willis) as his older self, and tries to shoot him. Old Joe spins around, and uses the gold on his back to deflect the bullet. He grabs a gold bar and throws it at Joe, then knocks him out with a punch.
Joe comes to, and finds a note, telling him to get out of town. Instead, Joe returns to his apartment, where he finds the Gat Men searching it and removing his silver. He traps Kid Blue in his floor safe, but is winged by another Gat Man, falls from his fire escape and blacks out.
Flashbacks explain this chain of events: Joe closes his loop, and moves to Shanghai per Abe's advice. We step quickly through the next 30 years, and see Joe has a good retirement. However, his continued drug use eats through his funds quickly, and he must continue working with local crime gangs to make ends meet. Until he meets a beautiful, caring woman who helps him get sober. He marries her and settles down. Life is good until the end of the 30 years, when he is grabbed, and prepared to be sent back to be killed. He manages to slip his wrist restraints, get his hood off, and kill his attackers. He then jumps into the time machine. We see the previous events unfold, and watch Old Joe escape in Joe's truck. He buys all the first aid supplies he can find, and heads to Joe's apartment. Old Joe sees Young Joe fall from the balcony and land on a car. He rescues him, and disappears again.
Old Joe looks up some cryptic numbers at the library, when letters begin to form on his hand and arm spelling out "Beatrix." Old Joe meets Young Joe at the diner. They order identical meals. Old Joe asks Joe how his French lessons are going, then says in French: "I know you have a gun under the table pointed at me." When Young Joe doesn't understand, Old Joe says "It's okay that you didn't get all that. You will." As Old Joe says, he's glad he learned the language. Old Joe tells Joe more about the Rainmaker: he appeared out of nowhere, and single-handedly took control of all the major crime syndicates within six months. He's responsible for mass executions and vagrant purgings, and he ordered the closing of all loops. The syndicate men killed Old Joe's wife by accident when Old Joe was captured. Shortly before this, Old Dale (one of Joe's looper colleagues) gave Old Joe a numerical sequence that hints at finding the rainmaker. Old Joe knows that in Joe's present, the Rainmaker is living in the same county as a child. If Old Joe can kill the Rainmaker, then he never would be captured, and his wife would still be alive. All that is known about the Rainmaker is that he has a synthetic jaw, and he watched his mother being killed.
They tussle when Old Joe realizes that Young Joe still plans to kill him. The Joes notice that the diner has cleared out. Staff and customers have disappeared. Suddenly, the Gat Men burst in. Old Joe gives Joe a piece of a map with an address marked and a string of digits, and tells him that the Rainmaker may live there. Young Joe and the Gat Men shoot at Old Joe as he runs off. Then the Gat Men start shooting at Young Joe, who also runs off.
Young Joe follows the coordinates to a farmhouse owned by Sara (Blunt), who lives with her son Cid (Gagnon). When Joe shows Sara the map, Sara recognizes the digits as Cid's birthday and the serial number of the hospital where he was born, prompting Young Joe to explain the situation about the Rainmaker. Sara proves to know a lot about loopers and how they work. The database Old Joe used with the string of digits produced three possible children born on the same day in the same hospital, and he is intent on killing them.
Sara tells Cid to stay away from Joe, but Cid is curious. He befriends Joe, and shows him some of the electronics gear he is playing with. Cid builds transmitters so Joe and Sara can signal each other. Joe is very impressed with the advanced work the five-year-old is doing.
Old Joe tracks down one of the potential Rainmaker children heading to a birthday party. He kills him, but when he realizes he is still existing in his past, he breaks down crying. He has killed the wrong child. He then heads to the other child's place, but is hesitant when he realizes it is where his girlfriend, Suzie, from 30 years earlier is living with her son. Instead of killing the child right away, he watches their apartment.
As Young Joe and Sara become close, he learns that she is a telekinetic with slightly more power than the other TKs, and that Cid was raised by Sara's sister for two years until she was somehow killed. Cid thinks Sara's sister was his mother, and does not believe that Sara is his real mother. Sara is shown to be frightened of Cid, running to her room and hiding in a safe when Cid gets angry at her in his belief that she's lying about being his mother.
The next day, one of the Gat Men, Jesse (Dillahunt), comes looking for Joe. Cid helps him escape, and Jesse leaves. While Cid and Joe are alone hiding from Jesse, Joe tells him how his own mother gave him to The Panhandlers, so that he grew up without her, a moment later saying that she sold him and that she used drugs. We see how being motherless led Joe to become a killer and a drug user. Jesse is suspicious of Sara, and returns, holding Sara at gunpoint when Joe comes down the stairs. As Joe tries to reason with Jesse, Cid starts to come down the stairs. Startled by Jesse, Cid falls down the stairs and goes into a rage. He lets out a massive telekinetic blast, killing Jesse. Jesse's blood "rains" out of his chest, implying how the Rainmaker's name was coined. Cid's extraordinary telekinetic abilities confirm to Joe that Cid is the Rainmaker, and that Sara's sister was killed by Cid when he lost control of his powers. Joe finds Cid in the sugarcane fields, crying, and comforts him. Sara helps Joe realize that this boy needs love, and may not turn into the Rainmaker if he is raised in a loving home.
Meanwhile, Kid Blue has tracked Old Joe to Suzie's apartment, and captures him when he breaks inside to kill the child.
Young Joe tells Sara and Cid to flee, surmising that his employers and/or Old Joe will target the farm. Old Joe breaks free, killing Abe and all the Gat Men except for Kid Blue, who is shot in the foot. As the two Joes confront each other near Sara's house, Kid Blue attacks and is killed by Young Joe.
Sara and Cid attempt to drive away, but Old Joe starts shooting at their truck. Cid wants Sara to stop the truck so they don't come closer, but instead, Sara steps on the gas, hoping to run Old Joe over. Getting scared, Cid uses his TK powers to cause the truck to flip. He and Sara attempt to run to the sugar cane field to hide. Old Joe attempts to shoot them and the bullet grazes Cid's cheek. Cid goes into another rage and uses a blast of his TK powers to suspend Sara and Old Joe in the air. Joe has been following after Old Joe in his truck, which is knocked over by the TK blast. Sara calms Cid, telling him repeatedly that she loves him and he'll be okay. Cid calms down and ends his TK storm. Sara hugs Cid, and he calls her 'Mom' for the first time, showing Joe that Cid can be controlled. Recovering, Old Joe grabs his gun, ready to shoot Cid. Sara sends Cid into the cane fields and uses her body as a shield, preventing Old Joe from shooting. Finally, Old Joe shoots Sara through the heart. Cid sees his mother die, then escapes through the sugar cane fields and onto a slowly passing freight train. Flashback to a moment before the shot was fired: Young Joe understands that by shooting Sara and wounding Cid, Old Joe creates the embittered child who will become the Rainmaker without his mother's love, and also realizes that even by killing Old Joe, the loop will not be closed and Old Joe will keep coming back. So Young Joe turns his gun on himself. He pulls the trigger and dies, thus closing the loop circuit from his end. Almost instantly, Old Joe disappears.
Sara lovingly puts Cid to bed after bandaging up the cut on his face caused by Old Joe's shot. Sara then goes back out to the sugar field and notices that the ground around the overturned truck is strewn with gold bars, which Old Joe looted from Abe's headquarters. She and Cid will now be well provided for. She walks over to Young Joe's body lying in the field, and takes a moment to stroke his hair, something that he had confided to Suzie that his own mother used to do for him.