In 1996, Miki Saegusa of the United Nations Godzilla Countermeasures Center (UNGCC) travels to Birth Island to monitor Godzilla and Little Godzilla following the defeat of SpaceGodzilla,[b] only to find the entire island destroyed and both monsters missing. Godzilla, now covered in lava-like rashes, subsequently appears in Hong Kong and destroys great swathes of the city with an empowered version of its atomic breath. The JSDF hires college student Kenkichi Yamane to unravel the mystery of Godzilla's condition. Yamane, a grandson of the same Dr. Kyohei Yamane who had encountered the first Godzilla, suspects that Godzilla's heart, which acts as a nuclear reactor, is undergoing a nuclear meltdown as a result of the monster absorbing the energy released from a volcanically triggered uranium deposit on Birth Island. Yamane theorizes that when Godzilla's temperature reaches 1,200°C (2,192°F), it will explode with enough energy to ignite Earth's atmosphere and reduce its surface to ash.

The JSDF deploys the Super X III, an aerial combat vehicle outfitted with ultra-low temperature lasers, in an attempt to reverse Godzilla's self-destruction. While Godzilla's meltdown is not stopped, it is halted long enough to render Godzilla unconscious temporarily. Meanwhile, a colony of Precambrian organisms mutated by the Oxygen Destroyer used to defeat the original Godzilla are awoken during the construction of the Tokyo Bay Aqua Line...