The Galactic Republic is in crisis. A separatist movement (secretly led by former Jedi Count Dooku) has threatened the peace. Senator Padmé Amidala, former Queen of Naboo, returns to the Galactic Senate to offer a vote against the creation of a Republic Army, even though there are no longer enough Jedi to maintain peace and order in the galaxy. Upon her arrival at Coruscant, she narrowly escapes an assassination attempt. As a result, Chancellor Palpatine requests that Jedi Obi-Wan Kenobi and his apprentice, Anakin Skywalker protect her.
That night, a mysterious bounty hunter makes another attempt on Amidala's life, and the Jedi Council asks Obi-Wan to track down the killer. Meanwhile, Anakin is given the assignment of protecting the Senator and escorting her back to her home planet of Naboo. Anakin welcomes the opportunity, as he often becomes angry and frustrated by Obi-Wan's criticism, and is glad to have an opportunity to be on his own. Representative Jar Jar Binks assumes the Senator's duties in her absence.
During the investigation, Obi-Wan is led to a mysterious planet called Kamino (missing from the Republic.s archives), where he discovers a secret clone army being developed for the Republic. He is told by the natives that the army was ordered some ten years ago by a Jedi named Sifo-Dyas-- believed by the Jedi Council to have died around the same time. A bounty hunter named Jango Fett was hired to be the template for the clones. Obi-Wan meets Jango on Kamino, and believes him to be the killer he has been tracking. After unsuccessfully trying to capture Jango Fett, Obi-Wan places a tracking device on his ship and follows him to the planet of Geonosis.
On Geonosis, Obi-Wan overhears conversations between Count Dooku and the Trade Federation, and learns that they are behind the separatist movement and have built up a new droid army. He also learns that it was the Federation that ordered the assassination of Amidala, as revenge for the Battle of Naboo (see Episode 1: The Phantom Menace). Obi-Wan sends a recorded message to the Jedi Council to inform them of his recent findings just before being captured.
Meanwhile, Anakin Skywalker and Padmé Amidala have been spending much time together on Naboo, and Anakin reveals his deep love for her. However, Padmé resists, explaining that it would be impossible for the two of them to be together, since she is a Senator and he is a Jedi. Anakin is angered by this, and experiences inner conflict between his strong desires for her and his duties as a Jedi. Eventually, however, both are embracing, unable to deny their love.
Anakin is also troubled by a newfound sense that his mother is in grave danger, and he beckons for Padmé to accompany him to his home planet of Tatooine (disobeying Obi-Wan's orders to remain on Naboo). Upon arriving, he tracks down his mother and learns from her new family that she is no longer a slave and is married. But, he also finds that she was kidnapped one month earlier by local Tuskens. Anankin travels through the night to track her down, and finds her in very poor condition in the Tusken caravan camp. Within moments she dies in his arms after only a few words. In a fit of rage, he slaughters the entire Tusken community -- including the women and children. Back at Coruscant, Yoda senses a terrible darkness in the Force coming from Anakin. Anakin brings his mother's body back to her home, where her funeral is held. Afterward, he confesses to Padmé that he is consumed with confusion with what he has done since he is filled with guilt, but also satisfaction.
Now that the Jedi Council knows of Dooku's army, Jedi Mace Windu leads a team to Geonosis. Unbeknownst to them, Anakin and Padmé also make their way to rescue Obi-Wan. Meanwhile, a suggestible Representative Binks calls for Chancellor Palpatine to be given emergency powers, with which he can call the recently discovered clone army into battle.
Back on Geonosis, Count Dooku tries to persuade Obi-Wan to join him, warning him that Darth Sidious is now in control of the Senate. Obi-Wan refuses to believe him, saying that the Jedi would have known if that was the case, which is a death sentence.
Anakin and Padmé arrive on the planet, but are quickly captured and also sentenced to death, joining Obi-Wan in an arena-like complex where three huge lizard creatures are unleashed on them as sport for the local population. During their struggle, Mace Windu arrives with his Jedi, and they battle Dooku's droids on the field. Even though Windu kills Jango Fett, defeat for the Jedi seems imminent. Luckily Yoda unexpectedly arrives with the Republic's new clone army.
A large battle ensues between the Republic's clone army, and the Separatist's droid army. Count Dooku attempts to escape, but Obi-Wan and Anakin track him to a secret hangar, where they engage him in combat. Unfortunately, they are no match for Dooku's mastery of the Force and the lightsaber, and in short order he injures Obi-Wan and cuts off Anakin's right arm. Yoda appears just as Dooku is about to finish them off, and the two masters of the Force go head-to-head in lightsaber combat. Dooku seems to sense he may be outmatched, so he uses the force to topple a massive pillar onto the incapacitated Obi-Wan and Anakin. When Yoda responds, focusing his attention on using the force to slow and divert the plummeting structure certain to kill them both, Dooku uses the distraction to quickly hop into his ship and escape. He meets up with his master, Darth Sidious, who is pleased that the war has begun -- as planned.
Back in Coruscant, Obi-Wan informs the Jedi Council of Dooku's warning that Darth Sidious is controlling the Senate. Yoda is hesitant to believe this, stating that the Dark Side is capable of creating fear and mistrust. But, he and Windu also agree that the Dark Side is now clouding everything, and that they should closely monitor the Senate.
At a large landing field, Palpatine, Bail Organa, and the other Loyalists watch as clone troopers and weapons of war board their starships, moving off to fight the Separatists.
Back on Naboo, Anakin (with a new mechanical hand) and Padmé hold a secret wedding, with only C-3PO and R2-D2 as witnesses.