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Doug Quaid dreams of walking on Mars, accompanied by a beautiful brunette. As the dream becomes a nightmare, he wakes. His wife, Lori, comforts him. Aware of his recurring dreams, she asks if the brunette was there, but Doug assures Lori that she is "the girl of his dreams." At breakfast, Doug watches a news report about a rebel leader named Kuato organizing an uprising on Mars. Recently, Kuato and his “Freedom Brigade” were trying to access the now-closed Pyramid Mines. Attempting to snuff out all rebels in the Mars mining community, Vilos Cohaagen, Mars Administrator, has vowed to use military force against the rebels in order to keep up production of the mines’ turbinium ore. After Lori changes the channel, Doug suggests to her that they move to Mars, as he feels he’s destined to accomplish something meaningful with his life. Riding the subway to work, Doug sees an advertisement for Rekall, a company that implants memories of vacations in clients’ minds, so they do not have to endure the hassle of actual travel. At his construction job, Doug speaks to co-worker Harry about Rekall. Harry tells him about a man who was “nearly lobotomized” after purchasing a mind trip from the company. Undeterred, Doug visits Rekall after work. The doctor, Bob McClane, encourages Doug to purchase memories from a trip to Saturn, but Doug has his mind set on Mars. McClane offers an additional perk called an "ego trip." For a little more money, Doug can visit Mars as a secret agent on a mission to save the planet from destruction. Doug accepts, and McClane’s aids strap him into the Rekall machine. Before undergoing anesthesia, Doug chooses a woman to accompany him on the trip, the brunette from his dreams. As the aids start the Rekall procedure, Doug becomes agitated, and McClane rushes into the room. Doug fights them, insisting he is a special agent and they have compromised his cover. The aids subdue him with tranquilizers and inform McClane that Doug's "ego trip" has yet to be implanted. McClane orders his aids to erase Doug’s memory of Rekall, destroy his records, and send him off in a cab. Doug awakes in a taxi as he arrives at the subway station. There, a group of thugs, including Doug’s co-worker Harry, attacks him. Harry tells Doug he is in trouble because he "blabbed about Mars." Doug fights the thugs and kills them. Returning home, Doug alerts Lori that he is being chased and tells her about Rekall. While Doug is in the other room, Lori contacts an agent named Richter. Lori attacks Doug, revealing that she is not actually his wife and their marriage is a false memory implanted by “The Agency." More agents arrive, and Doug manages to flee to the subway station, with Richter and his men close behind. Station guards spot Doug’s concealed weapon as he travels through an x-ray machine. As agents fire at him, Doug runs up an escalator, using the body of a bystander to shield himself from bullets. Doug escapes on a passing train. Richter alerts Cohaagen that Doug has fled. Richter feels a personal vendetta against Doug because Lori, who was acting as Doug’s wife, is actually married to Richter. However, Cohaagen commands Richter to deliver Doug alive so that his memory can be re-implanted and he can be returned to his false identity, with Lori back in place as his “wife.” Using a tracking device, Richter follows Doug to a motel. Just as Doug enters his hotel room, a stranger calls from a pay phone outside, informing him there is a tracking device inside his skull and he must cover his head with a wet towel to muffle the signal. Doug covers his head then rushes downstairs and picks up a suitcase the caller left for him on the street. Doug hijacks a cab, and travels to a remote location where he opens the suitcase and finds several gadgets inside. Doug experiments with a hologram device and creates an illusory doppelganger of himself. He then listens to a video message from himself, informing him that his actual name is Hauser, and that the Agency has erased his memory. The message instructs Doug to remove the tracking device from his brain by pulling it out through his nose. Richter arrives at the remote location, but Doug manages to escape yet again, while Richter and his men chase down a rat carrying the tracking device. Richter hears the end of the video message in which Hauser instructs Doug to go to Mars. Later, Doug arrives on Mars, disguised as a female tourist, while Richter patrols the customs kiosk in search of him. Doug's disguise malfunctions, but, when his identity is revealed, he uses his mask as an explosive device. After the mask detonates, agents return fire and shatter the surrounding glass dome, exposing the area to the vacuum of space. As people are sucked outside, Doug escapes. On a commuter train, Doug learns that Cohaagen has closed the main Pyramid Mine because of a rumored discovery of alien artifacts. Meanwhile, Cohaagen scolds Richter for failing to catch Doug, informing him that Kuato wants information from Doug’s head and may be able to get it using his psychic powers. Doug arrives at the Mars Hilton and discovers that Hauser has left a message, instructing him to visit the Venusville sector and find a lady named Melina. Benny, a cab driver, gives Doug a ride to The Last Resort, a brothel, just as a rebel firefight erupts. Doug finds Melina at The Last Resort and discovers that she is the brunette woman from his dreams. In private, Melina addresses Doug as Hauser and chastises him for abandoning his mission. Doug insists that he’s lost his memory. Melina reminds him that they were once in love, but she now believes that he is working for Cohaagen and only used her to “get inside.” Doug begs for Melina’s help, but she sends him away. After Doug leaves Venusville, Cohaagen announces to Mars citizens that martial law has been declared. Dr. Edgemar from Rekall arrives at the hotel and informs Doug that he has suffered a "schizoid embolism," and that, instead of being on Mars, he is still strapped in a Rekall machine. Lori arrives to affirm Edgemar’s story, insisting she is his real wife. The doctor offers a pill, which Doug must take as a symbol of his desire to return to reality. Almost convinced, Doug notices a bead a sweat roll down Edgemar's cheek. Doug then kills the doctor. Agents burst in and subdue Doug, escorting him to the elevator. When the elevator doors open, Melina appears and fires at the agents. Melina and Lori fight each other. Regaining consciousness, Doug shoots Lori and saves Melina. Richter pursues Doug and Melina, discovering the body of his wife on the way. Melina tells Doug that Kuato wants to see him, and they jump into Benny's cab. Doug, Melina, and Benny return to The Last Resort and Tony, a mutant, helps them elude Richter through a secret hole in the wall. Arriving to The Last Resort, Richter and his men fire upon the citizens of Venusville. Cohaagen instructs Richter to stop fighting and leave the sector. He then seals all the entryways to Venusville in an attempt to suffocate the rebels who are hiding in the area. Meanwhile, Melina, Doug, and Benny arrive at Kuato’s hideaway. George, a rebel, finds Doug and leads him to Kuato’s lair, where George reveals that Kuato is, in fact, a psychic mutant living in his chest. Kuato encourages Doug to "open his mind," insisting that Doug holds information in his memory that will allow for the salvation of Mars. Doug searches his mind and recalls that the Pyramid Mine contains a device designed by aliens 500,000 years ago that will create oxygen and can be activated at the press of a button. Agents burst through the walls, and George, Doug and Melina flee. Benny, secretly one of Cohaagen’s agents, stops them at gunpoint and shoots George. Just before Richter kills Kuato, the mutant orders Doug to “start the reactor” and “free Mars.” Cohaagen’s men take Doug and Melina to a Rekall facility. Cohaagen informs Doug that Hauser, his former identity, was an agent for the mining company who volunteered to become Doug Quaid in order to fool the rebels. In another video message, Hauser informs Doug that all has gone according to plan, but now he requires his body back. Doug and Melina manage to break free from the Rekall machines, steal guns, and rush to the reactor. Meanwhile, citizens of Venusville may die in one hour if their oxygen is not restored. Cohaagen orders Richter to kill Doug. Meanwhile, Benny chases Doug and Melina as they search through tunnels for an entrance to the reactor, but Doug kills Benny. After finding the entrance, Doug realizes that the reactor melts ice at Mars’s core to create oxygen. Richter and his agents catch up with Doug and Melina inside the reactor. Using Doug's hologram device to escape them, Doug manages to kill Richter from an elevator platform on his way to the site of the button. There, Cohaagen awaits, threatening to kill Doug. Melina shoots Cohaagen from the elevator. Cohaagen then activates a bomb which Doug throws into a tunnel inside the reactor. The bomb explodes, destroying the protective shield surrounding the reactor and exposing them to space. Cohaagen is sucked out and dies from lack of oxygen. Doug starts the reactor just before he and Melina are also sucked into space. The reactor creates a tremendous amount of oxygen that infuses the atmosphere, saving Doug and Melina just in time and allowing all inhabitants of Mars to breathe. Doug worries he is dreaming, then kisses Melina.

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