"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 at his supervisor who refuses to let him stop a mugging, resulting in him losing his job. Returning home, Bob finds a message from a woman named Mirage, who convinces him to become Mr. Incredible again and gives him a mission to destroy a malfunctioning robot called the Omnidroid promising a substantial reward. Arriving on Nomanisan Island, Bob is able to defeat the robot 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 the children. 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 jet to head for Nomanisan, but finds Violet and Dash have stowed away wearing their own costumes, leaving Jack-Jack in the care of a teenage babysitter. Syndrome picks up Helen’s radio transmissions and destroys the jet, but Helen along with the children 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 having risked her life in dealing with an escape attempt by Mr. Incredible, releases Bob and informs him that his family is alive. Helen appears and races off with Bob to find the children when they are spotted by security. 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 van 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 blow a hole through the Omnidroid, again tearing out its power source, destroying it. Returning home, the Parrs find Syndrome has taken Jack-Jack and intends to raise him as his own sidekick to seek revenge on the family. As Syndrome tries to escape to his jet, Jack-Jack's own morphing superpowers start to manifest, which distracts Syndrome, causing him to drop the baby. As Jack-jack falls, Helen has Bob throw her upwards to catch the baby, and as Syndrome crawls into his hovering jet, Bob throws his own car at the jet, knocking Syndrome into the jet's intake. Syndrome's cape gets caught in the whirling fan blades of the engine, which sucks him in. The jet explodes and destroys the Parr's house, but Violet's shield ability protects the family.
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.