Public opinion turns against superheroes due to the collateral damage caused by their crime-fighting. After several lawsuits, the government initiates the Superhero Relocation Program, which forces "supers" to permanently adhere to their secret identities and abandon their exploits.
Fifteen years later, Bob and Helen Parr—formerly known as Mr Incredible and Elastigirl—and their children, Violet, Dash, and baby Jack-Jack, are a suburban family living in Metroville. Although he loves his family, Bob resents the mundanity of his suburban lifestyle and white-collar job as an insurance adjuster. Together with his best friend, Lucius Best, formerly known as Frozone, Bob occasionally relives "the glory days" by moonlighting as a vigilante.
One day, after his supervisor, Gilbert Huph, prevents him from stopping a mugging, Bob loses his temper and injures him, resulting in Bob's dismissal. Returning home, Bob receives a message from a woman called Mirage, who gives him a paying mission to destroy a savage, indestructible, tripod-like robot, the Omnidroid, on the remote island of Nomanisan. Bob battles and disables it by tricking it into ripping out its own power source.
Bob finds the action and higher pay rejuvenating. He improves his relationship with his family and begins rigorous physical training to get back in shape while awaiting another assignment from Mirage over the next two months. Finding a tear in his super suit, he visits superhero costume designer Edna Mode to have it mended. Assuming that Helen knows what Bob is doing, Edna also makes new suits for Bob and the rest of his family.
Setting out for Nomanisan once again, Bob discovers Mirage is working for Buddy Pine, a disaffected former fan whom he had rejected as his sidekick, Incrediboy. Buddy has now become a ruthless inventor and wealthy arms dealer under the alias Syndrome. He has been perfecting the Omnidroid by hiring different superheroes to fight it, killing them in the process. Syndrome intends to send the perfected Omnidroid to Metroville, where he will secretly manipulate its controls to defeat it in public, becoming a "hero" himself. He then plans to sell his inventions, intent on having countless individuals with technology-based superpowers to make the term "super" commonplace.
Helen visits Edna and learns what Bob has been up to. She activates a beacon Edna built into the suits to find Bob, inadvertently causing him to be captured while infiltrating Syndrome's base. Helen borrows a private plane to travel to Nomanisan. She finds out that Violet and Dash have stowed away, leaving Jack-Jack with babysitter Kari. Helen's radio transmissions are picked up by Syndrome, who sends anti-aircraft missiles to shoot her down. The plane is destroyed, but Helen and the kids survive and use their powers to reach the island. Helen infiltrates the base and discovers Syndrome's plan. Discontented with Syndrome's indifference when her life was threatened, Mirage releases Bob and informs him of his family's survival. Helen arrives and races off with Bob to find their children. Syndrome's guards chase Dash and Violet, who fend them off with their powers before reuniting with their parents. Syndrome captures the family, leaving them imprisoned while he follows the rocket transporting the Omnidroid to Metroville.
The Parrs escape to Metroville in another rocket with Mirage's help. Due to its advanced artificial intelligence, the Omnidroid recognizes Syndrome as a threat to itself and shoots off the remote control on Syndrome's wrist, making him incapable of controlling it and knocking him unconscious. The Parrs and Lucius fight the Omnidroid together. Helen acquires the remote control, allowing Bob to use one of the robot's claws to destroy its power source. Returning home, the Parrs find Syndrome, who abducts Jack-Jack with the intention of raising him as his own sidekick out of revenge. As Syndrome flies up toward his jet, Jack-Jack's own shapeshifting superpowers manifest and he escapes Syndrome in midair. Helen catches Jack-Jack, and Bob throws his car at Syndrome's plane as he boards it. Syndrome is sucked into the jet's turbine by his own cape, killing him and causing the plane to explode, the wreckage destroying the Parrs house in the process.
Three months later, the Parrs witnessed the arrival of the supervillain the Underminer. They don their superhero masks, ready to face a new threat together as a family.