Hangar 18 is about a cover-up following a UFO incident aboard the Space Shuttle. A satellite, just launched from the orbiter, collides with an unidentified object which, after being spotted on radar moving at great speeds, had positioned itself just over the shuttle. The collision kills an astronaut in the launch bay. The events are witnessed by Bancroft and Price, the astronauts aboard. After returning to Earth, the two are immediately stymied when they try to discuss what happened. They are told by Harry Forbes, Deputy Director of NASA, that “everything is going to be all right”.
After making a controlled landing in the Arizona desert, the damaged alien spacecraft has been recovered, taken to an air force base in Texas and installed inside Hangar 18 where scientists and other technicians, headed by Harry Forbes, can study it. Due to an impending presidential election, government officials are anxious that there be no chance of the press or the public getting an inkling of this event.
Meanwhile, unbeknownst to Harry Forbes, the air force puts out a news story blaming Bancroft and Price for the death of their colleague and for the destruction of a satellite. The men know they can prove otherwise by viewing the telemetry tapes which recorded the UFO, but when they see them, all evidence of the object has been erased. Through a friend who works at a remote tracking station, Bancroft and Price are able to see the real telemetry and discover where the alien craft landed. They set out to prove a cover-up and clear their names.
In the hangar, investigators who enter the ship find it to have been manned by a crew of two, both now dead. (During the collision with the satellite, some chemicals were released producing a short-lived toxic gas). As technicians and scientists work, they discover several things: a woman in some sort of stasis, who later wakes up screaming; symbols on the control panels match those used by ancient Earth civilizations; the ship’s computer reveals extensive surveillance footage of power plants, military bases, industrial plants and major cities worldwide. Upon autopsy, the aliens’ physiology shows they and humans underwent a similar evolutionary process. A scientist deduces that the ship could not have reached Earth on its own; that it must have launched from a larger, faster and more long-ranged mother ship.
In their dogged pursuit of the truth, Bancroft and Price get closer to Hangar 18 but are targets of government agents. They elude one team of agents, who are killed during a high-speed chase. Later, as they are driving, they realize their rental car has no brakes; after careening along roads, they come to rest on the grounds of a gas refinery. The agents begin shooting at them, so they drive off in an oil tanker. With the agents following them, Price climbs onto the tanker, lets some gas out of the truck, lights an emergency flare, and tosses the flare. This kills their pursuers, but Price is fatally shot in the process, and dies shortly after. When Harry Forbes learns of Price’s death, he demands that the air force produce Bancroft at Hangar 18, or he will go to the press with the truth. Their cover-up, and their careers, now threatened, government officials decide to remotely fly a plane filled with explosives into Hangar 18, thereby finally assuring secrecy.
The researchers have determined that the aliens have been to Earth before and that human beings are, in fact, their descendants. Further examination of the video footage reveals that the industrial and military sites are “Designated Landing Areas”, suggesting that the aliens are preparing to return in the near future. Bancroft arrives at the base and, after being chased, comes across Harry Forbes who shows him the alien craft. Just as it is revealed that a translation indicates the aliens are about to return, the plane crashes into Hangar 18.
The next day, a news report about the explosion says that Bancroft, Harry Forbes and some technicians survived because, as NASA has stated, they were shielded inside an alien spacecraft. Harry Forbes has scheduled a press conference for that afternoon.