San Drad, California has been overrun by Xenomorphs. Two soldiers were caught in the town during the initial alien outbreak and were abandoned by the rest of their team as well as their superiors, and are cornered by a swarm of xenomorph drones. Before they can be killed, two Predators appear and destroy the xenomorphs, saving the soldiers (who are assumed to be humans but are later revealed to be cyborgs judging by their Character's Profile during the game's attract mode). The Predators offer an alliance with the cybernetic humans, in order to stop the Xenomorph infestation. Eventually, it is discovered that the Alien presence on Earth (and the subsequent swarm that overran San Drad) was the result of an experiment headed by an USCM colonel in conjunction with the Weyland-Yutani corporation. In the end, the Alien Hive on Earth is destroyed in a scene similar to that in the ending of the fourth Alien film, Alien: Resurrection - A military ship is set on a course that causes it to crash into San Drad, destroying the Alien threat along with a good portion of the western US, if the explosion in the ending credits is to scale. The story ends with the veteran Predator (Predator Warrior) breaking off his wrist blade and giving the piece to Linn and Dutch. When asked why the Predators helped, they jokingly light their Plasma Cannon sights at them with the leader saying, "They'll know." before departing into space. Indicating their hunting season is over...for now.
The game consists of seven stages, each of which ends in a boss fight.
- City of Despair: Fight a horde of aliens that have overrun the city streets, then retreat into a basement to fight Chrysalis.
- War in the Underpass: Escape the city through the sewers and fight past Royal Claws.
- Forced Assault: While riding an armored transport vehicle, shoot down waves of attackers and their leader, Arachnoid. The "Super Magazine" power-up is in effect throughout this stage.
- Assault on a Queen: Enter a lair swarming with infected humans and egg chambers, then defeat the Alien Queen. After completing this stage, the characters see the crash-landing of a military drop ship in a nearby forest and begin to investigate.
- Secrets: Take out the soldiers guarding the crash site and the one operating a Power Loader to destroy all escaped aliens.
- Nightmare in the Lab: Fight through the soldiers guarding a bio-war lab - and the aliens that escape from captivity to swarm it - and face down a Mad Predator who has been used as a test subject for the experiment. (If two or more players are in the game going into the boss fight, two Mad Predators appear.)
- Hunts End: Board the renegade colonel's ship and defeat the (much stronger) Alien Queen after it tears him in half. Chrysalis, two Royal Claws, and two Power Loaders must be defeated during this stage as well.