The film begins immediately following the events of Alien vs. Predator, onboard the Predator spaceship leaving Earth which is carrying dead Aliens, living facehuggers, and the body of the dead Predator who had defeated the Alien queen. A chestburster erupts from the dead Predator's body; it is a new creature which is a hybrid of Alien and Predator characteristics known as a "Predalien". It quickly grows into an adult and begins killing the Predators onboard the ship. One Predator fires at it, creating a hole in the hull and causing the ship to crash in the forest outside of Gunnison, Colorado. With the Predators dead, the Predalien and several facehuggers escape into the forest and implant embryos into a father and son on a hunting trip as well as several homeless people living in the sewers.

A distress signal from the ship reaches the Predator homeworld and a lone Predator responds, coming to Earth and using his advanced technology to observe the cause of the crash and track the facehuggers. He begins to erase the evidence of the Aliens' presence, first by destroying the crashed ship and then by using a blue liquid to dissolve the bodies of the facehuggers and their victims.

Meanwhile, in Gunnison, ex-convict Dallas Howard has just returned to town after serving time in prison. He is greeted by Sheriff Eddie Morales and reunites with his younger brother Ricky. Ricky has a romantic interest in the more affluent Jesse and is being harassed by her current boyfriend Dale and his cohorts. Dale throws Ricky's keys into the sewer drain, and while Dallas and Ricky search for them they hear noises and see evidence that something strange is in the sewers. Meanwhile, Kelly O'Brien has also just returned to Gunnison from deployment in the army and is reunited with her husband Tim and daughter Molly. Sheriff Morales leads a search party into the forest to search for the father and son who have gone missing on their hunting trip. A deputy encounters and is killed by the Predator.

The Predator makes his way into the sewers and fights several adult Aliens. The battle reaches the surface, where the Aliens disperse into the town. The Predator pursues several of them to the city’s power plant, where the explosions caused by his weapons' fire cause a citywide blackout. Ricky and Jesse meet at the high school swimming pool, but are interrupted by Dale and his friends just as the blackout occurs and an Alien enters the building, killing two of Dale’s friends. An Alien also invades the O’Brien home, killing Tim while Kelly escapes with Molly. They meet up with Ricky, Jesse, Dale, Dallas, and Sheriff Morales at a sporting goods store to gather guns. National Guard troops arrive but are quickly killed by the Aliens. The battle between the Predator and the Aliens enters the sporting goods store, where Dale is killed and the Predator’s shoulder cannons are damaged. He is able to modify one into a hand-held blaster.