In 1988, a psychic explosion destroys Tokyo and initiates World War III. A new city called Neo-Tokyo is eventually built in its place, but by 2019, a year before the city is set to host the XXXII Olympic Games, the dystopian metropolis is gripped by anti-government terrorism and gang violence. One night, teen delinquent Shōtarō Kaneda has his bōsōzoku gang, the Capsules, battle the Clowns, their rivals. During the fighting, Kaneda’s best friend, Tetsuo Shima, crashes his motorcycle into Takashi, an esper with psychic powers, who had fled from a secret government laboratory with help from a covert revolutionary. Colonel Shikishima of the Japan Self-Defense Force, assisted by Masaru, another esper, orders Takashi escorted back to his home and Tetsuo hospitalized. When Kaneda and his gang are interrogated, he encounters Kei, a member of the revolutionaries, and arranges her release along with the Capsules.
Shikishima and Doctor Ōnishi discover that Tetsuo possesses psychic abilities similar to Akira, an esper who caused Tokyo’s destruction. Meanwhile, Takashi’s friend Kiyoko has visions of Neo-Tokyo’s impending destruction, and Shikishima orders Ōnishi to kill Tetsuo if the power grows out of control. Fleeing from the hospital, Tetsuo steals Kaneda’s motorcycle, accompanied by his girlfriend Kaori. The Clowns ambush the two but the Capsules rescue them. After Tetsuo suffers severe migraines and hallucinations, the JSDF takes him back to the hospital. During a terrorist attack, Kaneda rescues Kei from capture and joins the rebels when he overhears their plans to capture Tetsuo. At the hospital, the espers attempt to help Tetsuo bring forth his psychic powers by heightening his emotional distress, but fail. Angered, Tetsuo goes on a violent rampage through the hospital, intent on killing the espers. Kaneda, Kei and Shikishima attempt to stop Tetsuo’s assault, but are unsuccessful. Learning Akira lies in cryonic storage next to the Olympic Stadium’s construction ground in Old-Tokyo, Tetsuo escapes the hospital.
Aided telepathically by Kiyoko, Kei escapes along with Kaneda to prevent Tetsuo from releasing Akira. Meanwhile, Shikishima stages a coup d’état in search of Tetsuo. Tetsuo ambushes Kaneda’s friends Yamagata and Kai, killing the former. After being told of Yamagata’s death, Kaneda pursues Tetsuo to exact revenge. Meanwhile, Tetsuo launches a rampage on Neo-Tokyo, eventually arriving at Akira’s cryogenic storage dewar in the stadium. He fights Kei and exhumes Akira’s remains but finds only tissue samples. Shikishima explains that Akira was dissected, frozen, and preserved for future studies. Kaneda battles Tetsuo and Shikishima uses a laser satellite to kill Tetsuo, but their plans fail. Tetsuo destroys the satellite and fits himself with an artificial arm.
Meanwhile, as Kaori finds Tetsuo in immense pain, Shikishima reveals to Tetsuo that the espers’ migraine-controlling drugs are to stunt the evolution of uncontrollable abilities. Tetsuo attempts to seek a cure from Kaori, but gets shot by Shikishima. Tetsuo’s arm mutates and he attempts to kill Shikishima before Kaneda rescues Shikishima and ambushes Tetsuo. Unable to control his powers, Tetsuo mutates into a gigantic writhing mass and he engulfs both Kaneda and Kaori, killing and assimilating the latter.
The espers awaken Akira, having grown beyond the requirement of a coherent biological form. Manifesting himself from the canisters, Akira reunites with his friends and triggers a second psychic explosion, dragging Tetsuo and Kaneda with it. As Tetsuo struggles against Akira’s psychokinetic powers, the espers teleport Shikishima away from the stadium, and Takashi leaps into the explosion to save Kaneda. The other espers aid in the effort at the cost of being unable to return. In the explosion, Kaneda experiences Tetsuo’s and the espers’ childhood flashbacks, including how much Tetsuo trusted Kaneda and how the children were trained and altered before Tokyo’s initial destruction.
The espers help Kaneda escape and inform him that Akira will be taking Tetsuo to safety; Kiyoko reveals that Kei has begun to develop psychic powers. The explosion destroys most of Neo-Tokyo, killing Ōnishi in the process. In the aftermath, Kaneda discovers that Kei and Kai have survived, and they drive off into Neo-Tokyo while Shikishima watches the sun rise over the city. Tetsuo comes into control of his powers, and he triggers a big bang in an alternate dimension.