In 2029, with the advance of cybernetic technology, the human body can be “augmented” or even completely replaced with cybernetic parts. Another significant achievement is the cyberbrain, a mechanical casing for the human brain that allows access to the Internet and other networks. An often-mentioned term is “ghost”, referring to the consciousness inhabiting the body (the “shell”).
Major Motoko Kusanagi is an assault-team leader for the Public Security Section 9 of “New Port City” in Japan. Following a request from Nakamura, chief of Section 6, she successfully assassinates a diplomat of a foreign country to prevent a programmer named Daita from defecting.
The Foreign Minister’s interpreter is ghost-hacked, presumably to assassinate VIPs in an upcoming meeting. Believing the perpetrator is the mysterious Puppet Master, Kusanagi’s team follows the traced telephone calls that sent the virus. After a chase, they capture a garbage man and a thug. However, both are only ghost-hacked individuals with no clue about the Puppet Master. The investigation again comes to a dead end.
Megatech Body, a “shell” manufacturer with suspected close ties to the government, is hacked and assembles a cybernetic body. The body escapes but is hit by a truck. As Section 9 examines the body, they find a human “ghost” inside its computer brain. Unexpectedly, Section 6’s department chief Nakamura arrives to reclaim the body. He claims that the “ghost” inside the brain is the Puppet Master himself, lured into the body by Section 6. The body reactivates itself, claims to be a sentient being, and requests political asylum. After the Puppet Master initiates a brief argument about what constitutes a human, a camouflaged agent accompanying Nakamura starts a diversion and gets away with the body.
Having suspected foul play, Kusanagi’s team is prepared and immediately pursues the agent. Meanwhile, Section 9 researches “Project 2501”, mentioned earlier by the Puppet Master, and finds a connection with Daita, whom Section 6 tries to keep from defecting the country. Facing the discovered information, Daisuke Aramaki, chief of Section 9, concludes that Section 6 created the Puppet Master itself for various political purposes, and now seek to reclaim the body that it currently inhabits.
Kusanagi follows the car carrying the body to an abandoned building, where she discovers it being protected by a large tachikoma. Anxious to face the Puppet Master’s ghost, Kusanagi engages the tank without backup, resulting in her body being mostly dismembered. Her partner Batou arrives in time to save her, and helps connect her brain to the Puppet Master’s.
The Puppet Master explains to Kusanagi that he was created by Section 6. While wandering various networks, he became sentient and began to contemplate his existence. Deciding the essence of humanity is reproduction and mortality, he wants to exist within a physical brain that will eventually die. As he could not escape Section 6’s network, he had to download himself into a cybernetic body. Having interacted with Kusanagi (without her knowledge), he believes she is also questioning her humanity, and they have a lot in common. He proposes merging their ghosts, in return, Kusanagi would gain all of his capabilities. Kusanagi agrees to the merge.
Snipers from Section 6 approach the building, intending to destroy the Puppet Master’s and Kusanagi’s brains to cover up Project 2501. The Puppet Master’s shell is destroyed, but Batou shields Kusanagi’s head in time to save her brain. As Section 9 closes in on the site, the snipers retreat.
“Kusanagi” wakes up in Batou’s safe house with her previous shell’s head attached to a new cyborg child body. She tells Batou that the entity within her body is neither Kusanagi nor the Puppet Master, but a combination of both. She promises Batou they will meet again, leaves the house and wonders where to go next.