Marco Pagot, a former WWI pilot who has lost his faith in humanity, now goes by the name Porco Rosso after being cursed and transformed into a pig. As an airborne bounty hunter, he operates from a small island hideout, offering his services for a fee. When sea pirates kidnap a group of girls from a cruise liner, Porco springs into action, inflicting significant damage to their aircraft. He cleverly negotiates the return of the girls for half of the collected loot, which the pirates reluctantly agree to, and Porco returns the girls safely to their cruise liner.
Following the successful rescue, Porco visits the Hotel Adriano, where he reconnects with Gina, an old friend who runs the hotel and performs in the club. During his visit, he meets an American pilot, Donald Curtis, who has been recruited by the local pirates. As Porco and Gina share a meal, they reminisce about old times. Porco's attention is drawn to a photograph on the wall, depicting several young people, one of whom has had his face scratched out. He expresses his desire for the photo to be taken down, but Gina refuses, stating it’s the only image of Marco from his days as a human.
Back at his island hideaway, Porco learns over the radio that several bands of pirates have come together to rob another cruise liner and are planning to avenge their previous defeat by targeting him next. Resolute, Porco decides to fly to Milan for both the scenery and plane repairs. However, on his way, a surprise dogfight ensues when Curtis spots him, resulting in severe damage to Porco's plane. In a desperate attempt to survive, Porco hides the wreckage beneath foliage on a small island, leading Curtis to believe he has killed him.
Porco arranges for his plane to be taken to Milan and calls Gina to assure her he is still alive. Despite her warnings about a warrant for his arrest in Italy, Porco remains undeterred. He reaches out to an acquaintance, Piccolo, who used to repair his aircraft. To his dismay, Porco discovers that Piccolo's former team has disbanded, and the new staff consists of Piccolo's granddaughter, Fio, and the female relatives of his past colleagues. Initially skeptical of Fio's inexperience, Porco is ultimately won over by her enthusiasm and expertise in aviation.
Once the repairs are completed, Porco learns of the police's knowledge about his whereabouts and prepares for a hasty escape. However, Fio insists on accompanying him to ensure the plane is in optimal condition. They perform a thrilling takeoff from a canal and return to Porco's island home, only to find the sea pirates have arrived intent on destruction. Fio, unexpectedly convincing them with her talk of honor among thieves, averts a confrontation. Yet, Curtis now challenges Porco to a duel, claiming he wants to propose to Fio should he win, while Fio makes it a condition that Porco’s victory would involve Curtis covering his plane repair costs.
As they make plans for the fight, Fio catches a glimpse of Porco's human form, momentarily sparking hope. She jokes about the possibility of him returning to human form if she kisses him, reminiscent of the classic fairytale, but Porco brushes her off, asking her to sleep instead. To soothe her, he regales her with tales of his past, recounting a harrowing dogfight during the war where he lost control amidst a cloud bank and witnessed fallen allies joining a celestial procession.
On the day of the duel, a crowd gathers on a remote island, eager to witness the showdown between Porco and Curtis. As the clash begins, Curtis's aggression meets Porco’s ethical stance of not harming other pilots. Their battle becomes chaotic as ammunition runs low, leading them to fight with whatever they can toss at each other. Ultimately, both pilots are knocked into the water, at which point Gina appears, scolding Marco for potentially ruining Fio's future. This moment reignites Porco’s fighting spirit, leading him to rally and defeat Curtis.
With the Italian Air Force on their way, chaos ensues, prompting Gina to expedite Fio's departure in her plane despite Fio's protests. As Fio flies away, she leans out to kiss Porco, a gesture that hints at unresolved feelings. Together, Porco and Curtis decide to distract the Italian forces from arresting Porco, yet before they proceed, Curtis notices a change in Porco’s expression.
In a voice-over, Fio narrates the aftermath of the duel. Porco successfully evades capture, while Curtis returns to the U.S. to become a movie star. Fio maintains her friendship with Gina, visiting her often, while the pirates continue their frequent visits to Gina’s establishment over the years. Fio eventually takes the reins of the Piccolo Company, utilizing her skills and knowledge in aircraft design. As for the fate of Porco and Gina’s relationship, Fio leaves it an open-ended mystery.
