"Supers" – humans with superpowers – are forced into civilian relocation programs after facing several lawsuits from peripheral damage caused by their crime fighting activities. Fifteen years after relocation, Bob and Helen Parr, formerly Mr. Incredible and Elastigirl, and their children Violet, Dash, and Jack-Jack live as a suburban family. Bob is unsatisfied with suburban life and his white-collar job and longs for the glory days. On some nights, Bob and his old friend Lucius Best, formerly Frozone, perform vigilante work, unbeknownst to Helen. One day, Bob loses his temper when his supervisor refuses to let him stop a mugging, causing Bob to be dismissed. Returning home, Bob finds a message from a mysterious woman named Mirage, who convinces him to become Mr. Incredible again and gives him a mission to destroy a savage robot called the Omnidroid on the remote island of Nomanisan, promising a substantial reward. Arriving on Nomanisan Island, Bob is able to find and defeat the Omnidroid by tricking it into ripping out its own power source.
Bob is rejuvenated by being able to use his powers freely, improving his attitude and relationship with his family, and he begins rigorous training while waiting for more work from Mirage. Discovering a fresh tear in his suit, Bob visits superhero costume designer Edna Mode who decides to make him and his whole family suits, unbeknownst to Helen and their kids. Leaving for Nomanisan once again, Bob discovers that Mirage is working for Buddy Pine, a former fan shunned by Mr. Incredible and now identifying as the super-villain Syndrome. Syndrome intends to perfect the Omnidroid and defeat it in public in Metroville while manipulating its controls to become a hero himself, and then sell his inventions so everyone will become equally "super", making the term meaningless. Bob sneaks into Syndrome's base and finds Syndrome's computer. From it, Bob discovers Syndrome murdered countless retired superheroes with previous Omnidroid prototypes to improve its design. Meanwhile, Helen visits Edna, finds out what Bob has been up to, and activates a homing beacon to find him, inadvertently causing Bob to be discovered and captured.
Helen borrows a private plane to head for Nomanisan, but finds Violet and Dash have stowed away wearing their own suits, leaving Jack-Jack in the care of a teenage babysitter. Syndrome picks up Helen’s radio transmissions and shoots down the plane, but Helen along with the kids survive and make it to the island, though Bob thinks they are dead. Helen proceeds to the base to find Bob, discovering Syndrome's intentions to send the Omnidroid to Metroville in a rocket. Later, Mirage, distraught by Syndrome's true plans, releases Bob and informs him that his family is alive. Helen appears and races off with Bob to find their kids when they are spotted and chased by a number of Syndrome's guards through Nomanisan's tropical jungle. Dash and Violet use their powers to escape their captors and are joined by their parents, only to be captured by Syndrome, who then heads off to initiate his plan.
With Mirage's help, the Parrs escape, and use a security RV and a rocket booster to pursue Syndrome. In Metroville, the Omnidroid proves to be too intelligent, and knocks the remote that controls it out of Syndrome's grasp, knocking him unconscious and rampaging through the city. The Parrs and Lucius team up to fight the robot, until Bob uses Syndrome's remote control and one of the Omnidroid’s detached pincers to make it tear its power source out, destroying it. Returning home, the Parrs find Syndrome has Jack-Jack and intends on raising him as his own sidekick to seek revenge on the family. As Syndrome tries to escape to his jet, Jack-Jack's own shapeshifting superpowers start to manifest and distract Syndrome. Helen rescues Jack-Jack, and Bob kills Syndrome by throwing his own car at the jet, causing him to be sucked into the jet's turbine.
Three months later, the Parrs have readjusted to normal life, but the city is attacked by a villain called the Underminer. The family dons their superhero outfits, preparing to face the new threat.