In 1982, a giant extraterrestrial spaceship arrives and hovers over the South African city of Johannesburg. An investigation team finds over a million malnourished aliens (derogatorily called “Prawns”) inside, and the South African government relocates them to a camp called District 9. However, over the years it turns into a slum, and locals often complain that the aliens are filthy, ignorant lawbreakers who bleed resources from humans.
Following unrest between the aliens and locals, the government hires Multinational United (MNU), a huge weapons manufacturer, to relocate the aliens to a new camp outside the city. Piet Smit, an MNU executive, appoints MNU employee and his son-in-law Wikus van de Merwe, to lead the relocation. Meanwhile, three aliens, Christopher Johnson, his young son CJ and his friend Paul, search a District 9 garbage dump for an alien fuel in Prawn technology, which Christopher has had them spend the last twenty years synthesizing enough of to enact his plan. They finally finish in Paul’s shack as the relocation begins but when Wikus comes to the shack to serve Paul notice, he finds the hidden container with the fuel and accidentally sprays some of it in his face while confiscating it. Paul is killed by Koobus Venter, a cruel MNU mercenary.
Wikus begins mutating into an Prawn, starting with his left arm injured after the fuel exposure. He is immediately taken to the brutal MNU lab, where researchers discover his chimeric DNA grants him the ability to operate Prawn weaponry, that is biologically restricted for them. Wanting to capture this human/alien hybridity before Wikus fully transforms, Smit orders Wikus’s body to be vivisected and harvested for its profitable properties. Wikus, however, overpowers the lab personnel and escapes. While Venter’s forces hunt for him, a smear story is broadcast, one that reaches Wikus’ wife and Smit’s daughter Tania, claiming Wikus is a wanted fugitive who has contracted a contagious disease from copulating with aliens.
Wikus takes refuge in District 9, finding Christopher and the spaceship’s concealed command module dropship underneath his house. Christopher explains to Wikus the confiscated fuel is crucial to his plan of reactivating the dropship, and if he can get them in the dropship to the mothership he can cure Wikus. Wikus attempts to acquire weapons from the District 9 Nigerian arms dealer Obesandjo, who wants to eat Wikus’s alien arm to gain alien abilities. Wikus, however, seizes an alien weapon and escapes.
Wikus and Christopher force their way through MNU to the lab and retrieve the fuel. However, after seeing the barbarous experiments MNU has performed on his people in the lab (including a dissected Paul), Christopher tells Wikus he must return home as fast as possible for help and cannot undo Wikus’ mutation until he returns in three years due to the limited supply of the fuel. Enraged, Wikus knocks Christopher down and attempts to fly the module to the mothership himself, but it is shot down by Venter’s forces. Venter captures Wikus and Christopher, but Obesandjo’s gang ambushes the MNU convoy and seizes Wikus.
Meanwhile, CJ, remaining hidden in the dropship, remotely activates the mothership and a large, alien, mechanized battle suit in Obesandjo’s base. The suit guns down the Nigerians, and Wikus enters the suit and rescues Christopher from the mercenaries. Heading to the dropship, the two come under heavy fire, and Wikus stays behind to fend off the mercenaries, buying time for Christopher, who promises to return after three years and heal Wikus, to leave. After all of the other mercenaries are killed, Venter finally cripples the suit and is about to execute Wikus when slum aliens attack and dismember him alive. Christopher makes it into the dropship with CJ, and the dropship is levitated via a tractor beam back into the mothership, which leaves Earth.
MNU’s experiments are exposed, and the aliens are moved to the new camp, named District 10, which becomes better than District 9. Tania finds a metal flower on her doorstep, giving her hope that Wikus is still alive. Wikus, now completely alien, is shown in a junkyard crafting the flower for his wife.