After resigning from Nova Robotics following the events of the first film, Benjamin Jahrvi (né Jabituya) launches his own venture, the Titanic Toy Corporation, a small-shop operation run from the back of his truck. For two days he peddles his hand-crafted, advanced toy robots on the streets of a busy U.S. metropolis, chasing a dream of turning play into something closer to art. When one of his robots wanders into the office of a toy department buyer, Sandy Banatoni, she places a substantial order for 1,000 units, instantly changing the stakes for everyone involved.
Into this setup slides con artist Fred Ritter, who smooth-talks his way into brokering the deal and becomes Ben’s business partner. Fred also secures a crucial loan from a loan shark, which gives the fledgling company both ambition and pressure. The pair hire a crew to help assemble the order and move their operation into a derelict warehouse. Unknown to them, that warehouse sits at the nexus of a bank heist: thieves Saunders and Jones are tunneling right under the street to reach a vault across the road and steal the Vanderveer Collection of jewels.
When the criminals strike, they wreck Ben and Fred’s equipment and drive the workers away, sabotaging the fledgling enterprise just as Sandy’s deadline looms. But a boost arrives in the form of Johnny 5—a robot Ben helped create, who became sentient after a lightning strike. Johnny defends the warehouse, activates self-defense measures, and begins mass-producing the toys needed to meet the emergency order. Yet Johnny’s curiosity pulls him into the city, where he encounters a range of people who react with disbelief or hostility, until he befriends Oscar Baldwin, who works at the bank across the street from the warehouse.
Fred soon learns that Johnny is worth an astonishing sum—about $11 million—and he tries to broker a sale. Johnny escapes into the city, ends up in police custody, and is placed in a stolen goods warehouse where Ben claims him as his property. With Johnny’s abilities, he helps Ben negotiate with Sandy and win her interest, smoothing the path to fulfilling the deal.
The plot thickens as Oscar reveals himself as the mastermind behind the heist, employing Saunders and Jones to carry out the plan. With the Vanderveer Collection within reach, Oscar’s scheme hinges on locking Ben and Fred in the freezer of a Chinese restaurant and then luring Johnny into completing the tunnel to the vault. In a tense sequence, Sandy uses clue-like musical cues that Ben learned on a past date with her to guide them to Johnny’s location. After a brutal confrontation, Johnny is severely damaged by Saunders and Jones under Oscar’s orders.
Back at the warehouse, Ben, Fred, and Sandy return to face a mounting police suspicion that they are involved in the bank break-in. The law closes in, arresting Ben and Sandy, while Fred escapes and finds a battered Johnny in an alley, delivering news of Ben’s arrest. Fred’s attempt to repair Johnny by breaking into a Radio Shack yields limited results, but the trio is ultimately cleared by the police, who join the effort to locate Johnny.
United in purpose, Johnny vows vengeance as he and Fred pursue Oscar and his cohorts. Saunders and Jones are eventually captured, but Oscar attacks Fred and tries to flee by boat. Johnny gives chase, using a crane to swing Tarzan-style and capture Oscar, who is subsequently detained by the authorities. Ben, Fred, and Sandy arrive to tend to an exhausted Johnny as his power wanes, and he appears to die—before a defibrillator restores him to life.
Johnny is fully repaired and emerges as a celebrity. Ben, Fred, and Sandy launch a new company, Input Inc., with Johnny serving as its mascot. The trio also becomes United States citizens through the Oath of Allegiance, and during a post-ceremony interview, Johnny—now a symbol of a robotic future—leaps into the air and proclaims, > "I feel alive!"
