Following the events of "Terminator 2: Judgment Day", John Connor (Nick Stahl) has been living off-the-grid in Los Angeles. Although Judgment Day did not occur on August 29, 1997, the date given by the Terminator in the previous film, John does not believe that the prophesied war between humans and Skynet has been averted. Unable to locate John, Skynet sends a new model of Terminator, the T-X (Kristanna Loken), back in time to July 24, 2004 to kill his future lieutenants in the human Resistance. A more advanced model than previous Terminators, the T-X has an endoskeleton with built-in weaponry, a liquid metal exterior similar to the T-1000, and the ability to control other machines. The Resistance sends a reprogrammed T-850 model 101 Terminator (Arnold Schwarzenegger) back in time to protect the T-X's targets, including Kate Brewster (Claire Danes) and John. This Terminator reveals that in the future John and Kate are married, and that it successfully killed John in 2032 before being reprogrammed by Kate.

The Terminator saves John and Kate from the T-X's attack, and the three visit the grave of Sarah Connor, who died of leukemia some years before. Inside the grave they find a weapons cache left by Sarah's friends as a backup in the event that Judgment Day was not averted. The T-X and police arrive and a battle ensues, but John, Kate, and the Terminator manage to steal a hearse and escape. The Terminator has been programmed to take John and Kate to a safe location so that they may survive Judgment Day, which is to occur in a few hours, but John decides that they should attempt to prevent Skynet from being activated. After the destruction of Cyberdyne Systems in Terminator 2: Judgment Day, the United States Air Force took over the Skynet project and it is being headed by Kate's father, Lieutenant General Robert Brewster (David Andrews). However, the trio arrive too late to stop him from activating Skynet in an attempt to stop the spread of a massive computer virus. Skynet assumes control of the military's defense network just as the T-X arrives, taking control of various machines including T-1s in an attempt to eliminate John and Kate. John asks the dying General for the location of Skynet's system core, hoping to still stop Judgment Day, and is instructed to go to Crystal Peak, a military base built into the Sierra Nevada mountains.

Before John and Kate can escape by plane, the T-X takes control of the Terminator and it attacks them. It is able to override its programming and shut itself down just before killing John. As John and Kate arrive at Crystal Peak they are attacked by the T-X, but a rebooted Terminator crashes a helicopter into it. Even with its legs severed the T-X continues to pursue John and Kate, but the Terminator traps it under a blast door and detonates its last remaining hydrogen fuel cell in the T-X's mouth, destroying them both. John and Kate discover that Crystal Peak does not house Skynet's core, but is rather a Cold War-era fallout shelter for high-ranking government officials. General Brewster sent them there to protect them from the impending nuclear holocaust initiated by Skynet. Skynet in fact does not have a core but instead exists as software in cyberspace running on computers all over the world, making it effectively impossible to shut down. It begins a series of nuclear attacks on various cities, commencing Judgment Day. Soon after the attacks the equipment at Crystal Peak picks up transmissions from amateur radio operators and Montana's civil defense, to which John responds.