The film is set in Los Angeles in 1938, where a flight crew is preparing to launch a new aircraft known as the GeeBee. Pilot Cliff Secord is deep in conversation with his mechanic and best friend, Peevy (Alan Arkin), about their ambitions to showcase the plane in an upcoming national air show. As a good luck charm, Cliff places a piece of Beeman's chewing gum on the tail of the aircraft before confidently taking off for a test flight.
Unbeknownst to Cliff, a dramatic gunfight is unfolding below him, as a pair of gangsters engage in a fierce battle with FBI agents while escaping in a car. Mistaking Cliff for law enforcement, one gangster shoots at his plane. As Cliff struggles to regain control, the gangsters make their way to the runway, where chaos ensues. Following the collision of Cliff's plane with a car, the GeeBee crash-lands, and while he escapes the fiery wreckage, his courageous instincts push him to return for a treasured photo of his girlfriend — just as a massive explosion rocks the area when the gangster’s vehicle crashes into a fuel truck.
The unsuspecting FBI lays blame for the crash at Cliff’s feet, especially after they only recover what appears to be an old vacuum cleaner in the wreckage, prompting disappointment from Howard Hughes (Terry O'Quinn). A confrontation with the airfield owner, Bigelow (Jon Polito), leads to Cliff and Peevy being forced into humiliating clown acts that would take ages to clear their debts.
Determined to turn their fortunes around, Cliff discovers a hidden package in the biplane they are to use for the clown show. Inside, they find a mysterious rocket pack, which Cliff excitedly plans to use to make money despite Peevy's objections about its questionable origins. Meanwhile, gangster leader Eddie Valentine (Paul Sorvino) pressures his employer, Neville Sinclair (Timothy Dalton), for results, as Sinclair eagerly seeks the stolen rocket pack for his sinister purposes.
Cliff's love life also blossoms as he spends time with Jenny Blake, an aspiring actress who has recently auditioned for one of Sinclair's films. Their date night turns rocky when Cliff, still trying to cover up the chaotic truth of his test flight, inadvertently lies to Jenny. Conflict arises when she learns the truth, causing a rift in their relationship.
As events escalate, Cliff plunges into a world of espionage and crime as the saga unfolds through daring rescues, unexpected betrayals, and explosive showdowns. Cliff's rollercoaster ride as the Rocketeer culminates in a thrilling showdown atop a zeppelin, where heroism and love collide amidst the threat of war, leading to a dramatic escape for Cliff and Jenny. In the aftermath, the duo is gifted a bright future, not just as a couple, but also with newfound plans for the rocket pack, ensuring their adventures are far from over.
