Following the events of The Rise of Cobra, Duke has become the leader of the G.I. Joe unit. Zartan, who is impersonating the President of the United States, frames G.I. Joe for stealing nuclear warheads from Pakistan; the unit is subsequently eliminated in a military air strike with Duke as one of the casualties. Only three soldiers survive: heavy machine gunner Roadblock (Duke’s best friend and second-in-command), rookie sniper Flint, and counterintelligence officer Lady Jaye.
Meanwhile, Storm Shadow (who survived the destruction of the Arctic base) and Firefly rescue Cobra Commander from an underground maximum-security prison in Germany, leaving Destro behind as punishment for his failures in the previous movie. Storm Shadow is injured during the escape and retreats to a temple in the Himalayas to recover. Upon learning that he is alive, the Blind Master, leader of the Arashikage Clan, sends Snake Eyes and his apprentice Jinx, Storm Shadow’s cousin, to capture Storm Shadow so he can answer for the murder of his uncle, the Hard Master.
Roadblock, Flint, and Lady Jaye return to the United States where they set up a base of operations in a rundown gym in Roadblock’s hometown. After Zartan announces that Cobra will replace the Joes as the premier U.S. special forces unit, Lady Jaye deduces that someone is impersonating the President, and Roadblock leads them to General Joseph Colton, who provides them with weapons, and helps them infiltrate a fundraising event that the President will be attending. Lady Jaye steals a sample of the President’s DNA and confirms that he is Zartan. They escape after a confrontation with Firefly and Zandar, the head of the U.S. Secret Service’s Presidential Detail and a member of Cobra.
Snake Eyes and Jinx locate and capture Storm Shadow after a battle with some ninjas loyal to Storm Shadow and take him back to Japan, where Storm Shadow proclaims that he didn’t kill the Hard Master and proves it by fighting Snake Eyes with the weapon that killed the Hard Master, which breaks. Knowing that Arashikage steel does not break Blind Master deduces that Zartan was the one that murdered the Hard Master and framed Storm Shadow for it. With him cleared of murder, Storm Shadow then accompanies Snake Eyes and Jinx as they join the Joes’ efforts to stop Cobra and avenge the Hard Master.
Zartan invites the world leaders to a summit at historic Fort Sumter, where he blackmails them into disabling their nuclear arsenals, and reveals that he has created Project Zeus: seven orbital kinetic bombardment weapons of mass destruction at his command. He destroys Central London to prove his superiority, and threatens to destroy other capitals if the countries don’t submit to Cobra. Storm Shadow betrays Cobra Commander and kills Zartan, revealing Cobra’s deception to the world leaders. While Snake Eyes, Jinx, and Flint fight Cobra’s soldiers, Cobra Commander activates the remaining six weapons and instructs Firefly to protect the launch device. Firefly is killed in combat by Roadblock, who deactivates and destroys the orbital weapons. Meanwhile, Colton and Lady Jaye rescue the real President, while Storm Shadow kills Zartan.
Cobra Commander escapes during the battle and Storm Shadow disappears after avenging his uncle. The real President addresses the nation at a White House ceremony where Roadblock, Lady Jaye, Flint, Jinx, and Snake Eyes are commemorated as heroes. Colton presents Roadblock with an M1911 pistol that belonged to General George S. Patton, to use when he finally finds Cobra Commander. Roadblock proudly raises the weapon and fires a single shot in honor of his fallen comrades.