Lupin the 3rd vs. Detective Conan: The Movie begins with another daring theft committed by Kaito Kid, with a fabulous diamond as his target – only that Kaito is in this case merely a spectator from the sidelines. Other discrepancies in this case include “Kid” using a real gun and a high-powered boat, instead of his standard hang glider cape, to make his getaway. Conan Edogawa takes up pursuit, but is foiled by a shadowy figure using a sword to slice his skateboard in two; only then does he realize the true identity of the culprit: Arsène Lupin III.
As it turns out, Lupin acts under coercion; his love interest, Fujiko Mine, is being used as a hostage, with an explosive collar around her neck which will detonate if Lupin does not cooperate. The theft of the diamond, which Lupin discards shortly afterwards, was nothing more than a test of his abilities, as his real target is a gemstone named the Cherry Sapphire his “employer”, a mystery man later named Alan Smithee, is after. Mystified by Lupin’s behavior, the Tokyo Police under Juzo Megure consults Lupin’s would-be-nemesis Inspector Koichi Zenigata, with Miwako Sato and Wataru Takagi volunteering as assistants. However, despite Zenigata’s precautions, Lupin, disguised as Takagi, manages to steal the gem and get away.
Simultaneously, a famous young Italian pop singer named Emilio Baretti is arriving in Japan to conduct a concert tour; but amidst the news coverage Conan notices Daisuke Jigen among Baretti’s entourage. Ran Mouri’s friend Sonoko Suzuki arranges for a pre-concert meeting with her idol in his hotel, but upon arrival they stumble upon Megure and the police in Baretti’s suite, along with his manager, Claudia Belucci, and his producer, Luciano Carnevale. Baretti has received a threat letter telling him to cancel his concert or be killed. Despite the danger to Baretti’s life, Carnevale insists that the concert take place as scheduled. When Ran and Sonoko decide to leave, Conan stays behind to look for Jigen, whom he finds acting as Baretti’s bodyguard, although he evidently pursues yet another agenda.
In the meantime, Ran and Sonoko are suddenly joined by Baretti for a clandestine tour of Tokyo Sky Tree. Once there, he climbs to a high rampant in a desperate attempt to see the concert cancelled; when Ran finds him there, she begins reprimanding him, thinking he wants to commit suicide. A wind blast nearly blows them both off the tower, but they are saved by the combined efforts of Conan, Jigen and Sonoko. Chastised, Baretti confesses that Carnevale, who is affiliated with the Italian Mafia, uses his concerts as a cover to conduct illegal dealings, and therefore Baretti made up the threat to his life in order to have the Japan concert, an anacrusis for yet another deal, called off.
Eventually, Baretti’s concert starts as scheduled. However, Carnevale manages to evade police surveillance and make his way to Haneda Airport, where he meets with Smithee to conduct the deal. However, it is revealed at this point that the middleman who arranged this meeting and the owner of the Cherry Sapphire were Lupin’s associates Daisuke Jigen and Goemon Ishikawa XIII; Lupin has been in fact hired by the Vespanian government to retrieve a rare piece of ore stolen by Carnevale, a mineral which enables the construction of ultimate stealth technology. Smithee, a native from the (fictional) country of Gillanba, intended to use the ore to offset the military might of a neighboring country, a purpose neither the late queen of Vespania, Sakura, nor her daughter and successor Mira have been endorsing.
However, Smithee has brought heavily armed reinforcements, and despite the help of most of Conan and Lupin’s friends, Smithee finds an opening which enables him to take Conan as a hostage. Smithee and Carnevale attempt to escape by plane, but Lupin boards the craft, and he and Conan prepare to take down Smithee for good. Carnevale arrives and wildly fires a minigun at them, damaging the flight controls, mortally wounding Smithee and puncturing the hull, causing himself to be sucked out by the sudden decompression. When military jets attack, intending to destroy the ore samples before they can leave the country, Lupin reveals that the Cherry Sapphire is also made from a piece of Vespanian ore. After using it successfully to thwart the missiles shot at them, Conan and Lupin abandon the crashing plane via parachute and are subsequently picked up by a submarine temporarily appropriated by Fujiko and Ai Haibara.
In a post-credit scene, Conan, Ran and Haibara see Baretti off safely as he departs Japan. Lupin, in the meantime, tries to steal a national treasure from a Kansai temple, only to find Kaito Kid having already beaten him to it and alerted the police as payback for dressing up as him.