When the Japanese freighter Eiko-maru is destroyed near Odo Island, another ship – the Bingo-maru – is sent to investigate, only to meet the same fate with few survivors. A fishing boat from Odo is also destroyed, with one survivor. Fishing catches mysteriously drop to zero, blamed by an elder on the ancient sea creature known as “Godzilla.” Reporters arrive on Odo Island to further investigate. A villager tells one of the reporters that “something large is going crazy down there” ruining the fishing. That evening, a ritual dance to appease Godzilla is held during which the reporter learns that the locals used to sacrifice young girls. That night, a large storm strikes the island, destroying the reporters’ helicopter, and an unseen force destroys 17 homes, kills nine people and 20 of the villagers’ livestock.
Odo residents travel to Tokyo to demand disaster relief. The villagers’ and reporters’ evidence describes damage consistent with something large crushing the village. The government sends paleontologist Kyohei Yamane to lead an investigation to the island, where giant radioactive footprints and a trilobite are discovered. The village alarm bell is rung and Yamane and the villagers rush to see the monster, retreating after seeing that it is a giant dinosaur, which then roars, and returns to the ocean.
Yamane presents his findings in Tokyo, estimating that Godzilla is 50 metres (164 ft) tall and is evolved from an ancient sea creature becoming a terrestrial animal. He concludes that Godzilla has been disturbed from its deep underwater natural habitat by underwater hydrogen bomb testing. Debate ensues about notifying the public about the danger of the monster. Meanwhile, 17 ships are lost at sea.
Ten frigates are dispatched to attempt to kill the monster using depth charges. The mission disappoints Yamane who wants Godzilla to be studied. Godzilla survives the attack and appears off-shore. Officials appeal to Yamane for ideas to kill the monster, but Yamane tells them that Godzilla is unkillable, having survived H-bomb testing, and must be studied.
Yamane’s daughter, Emiko, decides to break off her arranged engagement to Yamane’s colleague, Daisuke Serizawa, because of her love for Hideto Ogata, a salvage ship captain. When a reporter arrives and asks to interview Serizawa, Emiko escorts the reporter to Serizawa’s lab. After Serizawa refuses to divulge his current work to the reporter, he gives Emiko a demonstration of his recent project on the condition she must keep it a secret. The demonstration horrifies her and she leaves without breaking off the engagement. Shortly after she returns home, the sound of Godzilla’s footsteps approaching is heard. Godzilla surfaces from Tokyo Bay and enters the city, scattering residents from its path. A passing commuter train collides with the monster, who then destroys the train. After further destruction, Godzilla returns to the ocean.
After consulting with international experts, the Japanese Self-Defense Forces construct a 30 metres (98 ft) tall, 50,000 volt electrified fence along the coast and deploy forces to stop and kill Godzilla. Yamane returns home, dismayed that there is no plan to study Godzilla for its resistance to radiation, where Emiko and Ogata await hoping to get his consent for them to wed. When Ogata disagrees with Yamane, Yamane tells him to leave. Godzilla resurfaces and breaks through to Tokyo, unleashing a more destructive rampage across the city. The Tokyo Tower and the National Diet Building are destroyed and there is a large loss of life.
Distraught by the devastation, Emiko tells Ogata about Serizawa’s research, a weapon called the “Oxygen Destroyer”, which disintegrates oxygen atoms and the organisms die of a rotting asphyxiation. Emiko and Ogata go to Serizawa to convince him to use the Oxygen Destroyer but he initially refuses. After watching a program displaying the nation’s current tragedy, Serizawa finally accepts Emiko and Ogata’s pleas.
A navy ship takes Ogata and Serizawa to plant the device in Tokyo Bay. After finding Godzilla, Serizawa unloads the device and cuts off his air support, taking the secrets of the Oxygen Destroyer to his death. The mission proves to be a success and Godzilla is destroyed but many mourn Serizawa’s death. Yamane reveals his belief that if nuclear weapons testing continues, another Godzilla may rise in the future.