Following the events in Aliens, the Colonial Marine spaceship Sulaco experiences an onboard fire and launches an escape pod containing Ellen Ripley, Newt, Hicks, and the damaged android Bishop who are all in cryonic stasis. During the launch, the ship's medical scans of the crew's cryotubes show an Alien facehugger attached to one of the crewmembers. The pod then crashes on Fiorina 'Fury' 161, a foundry facility and penal colony inhabited by all-male inmates with "double-Y" chromosome patterns. After some inmates recover the pod and its passengers, an Alien facehugger is seen approaching the prison dog. Ripley is taken in and awakened by Clemens (Charles Dance), the prison doctor, and is told she is the only survivor of the crash. Many of the ex-inmates have embraced an apocalyptic, millenarian religion which forbids sexual relations, and Ripley is warned by the prison warden (Glover) that her presence among them may have extremely disruptive effects.


Suspicious of what caused the escape pod to jettison and what killed her companions, Ripley requests that Clemens perform an autopsy on Newt. She fears that Newt may be carrying an Alien embryo in her body, though she does not share this information. Despite protests from the warden and his assistant, Aaron (Brown), the autopsy is conducted and no embryo is found in Newt's body, and Clemens proclaims she simply died in the crash. Meanwhile, Ripley's unusual behavior is beginning to frustrate the warden and is agitating the prisoners.


A funeral is performed for Newt and Hicks in which their bodies are cremated in the facility's enormous furnace. In another section of the facility, the prison dog goes into convulsions and an Alien bursts from its body. The Alien soon begins to attack members of the colony, killing several and returning an outcast prisoner (McGann) to his former deranged state. To get answers, Ripley recovers and re-activates the damaged android Bishop, who confirms that there was an Alien on the Sulaco and it came with them to Fiorina in the escape pod. She then informs Andrews of her previous encounters with the Aliens and suggests everyone work together to hunt it down and kill it. Andrews does not believe her story and explains there are no weapons of any kind in the entire facility. Their only hope of protection is the rescue ship being sent for Ripley by the Weyland-Yutani Corporation.