An alien spacecraft enters the Earth's atmosphere and jettisons a pod, which descends into a Central American jungle. Later, Major Alan "Dutch" Schaefer (Arnold Schwarzenegger) arrives in the same area with his elite team for an operation to rescue a presidential cabinet minister who had been abducted by guerrilla forces. The team consists of Mac Eliot (Bill Duke), Blain Cooper (Jesse Ventura), Billy Sole (Sonny Landham), Jorge "Poncho" Ramirez (Richard Chaves), and Rick Hawkins (Shane Black). Dutch's old military friend George Dillon (Carl Weathers), now working for the CIA, accompanies them as a liaison. The team is inserted into the jungle by helicopter and begins its hunt.
They soon find the wreckage of a downed helicopter and later, the remains of Army Special Forces, whose presence in the country puzzles Dutch. The group is horrified to find the bodies have been hung and have had their skin removed. They track the guerrillas to a heavily defended rebel encampment which they destroy, except for a woman named Anna (Elpidia Carrillo) whom they take prisoner. Dutch is enraged when Dillon confesses the rescue mission was just a ploy to get his group to attack the rebel camp, and that the men they had found in the downed helicopter had disappeared in a failed rescue of two CIA agents. As the team make their way to the extraction point, they are observed from afar by an unknown creature using thermal imaging.
Anna briefly escapes, but when Hawkins catches her, he is stabbed and dragged off. The nearly invisible creature spares the unarmed Anna. Moments later, while the team is looking for Hawkins' killer, Blain is killed. Mac physically sees the creature and opens fire on it, but it disappears into the jungle. Anna offers the team insight on the creature which has been something of a local legend for hundreds of years. The team sets a trap, but it avoids capture, severely wounding Poncho in the process. Mac and Dillon are killed in the ensuing chase, and Billy is slain making a stand. The Predator catches up to Dutch and engages in a short shootout during which Poncho is killed. Realizing the creature only attacks those possessing weapons, a wounded Dutch sends Anna unarmed to the extraction point. Jumping off a waterfall, he narrowly escapes the creature by inadvertently masking his body's heat signature with mud and witnesses the Predator's true form when its active camouflage fails in the water. Dutch applies more mud, improvises various weaponry and traps, then baits the Predator into coming out by starting a large fire, and yelling a loud, barbaric war cry.
Hearing Dutch's war-cry, the Predator arrives to investigate. Despite suffering minor injuries from his improvisation, the Predator eventually locates and traps him. Discarding its electronic weaponry and infared-vision helmet as a sign of respect, the muscular alien challenges Dutch to hand-to-hand combat. The ensuing fight is one-sided; despite the creature's blindness, it is easily able to beat him into submission, and moves for the kill. Battered and barely able to move, Dutch manages to drop the counterweight from one of his traps, which falls and crushes the creature. As Dutch asks the mortally wounded alien what it is, the creature mimics his question in garbled English and then activates a self-destruct mechanism on its wrist. Dutch barely escapes the nuclear explosion and is rescued by helicopter, along with Anna.
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