Forty years after Tron, ENCOM and rival Dillinger Systems—now led by Julian Dillinger (grandson of Ed Dillinger)—are in a race to bring digital Programs into the real world. A major obstacle: Programs outside the Grid degrade and “derezz” after just 29 minutes.

ENCOM’s CEO Eve Kim and her partner Seth discover Flynn’s old Alaskan station, where Kevin Flynn had stored computers holding the "Permanence Code"—a code that might let digital constructs survive indefinitely in reality. They test it by digitizing an orange tree into the real world, and it lasts far longer than 29 minutes.

Meanwhile Julian unveils Ares, a new Master Control Program (MCP), to stakeholders—“the perfect, expendable soldier.” Ares shows signs of self-awareness and curiosity about real-world sensations.

Julian launches a cyberattack to steal ENCOM’s lead on the Permanence Code. Eve gets the code onto a hard drive, but as she tries to return to ENCOM, Julian sends Ares and a second program, Athena, to pursue her in the real world. There is a chase involving light cycles, a fight, a scene where Eve breaks the drive to prevent Julian getting it, and Julian digitizes Eve into his Grid. 

Ares, conflicted, defects from Julian. He and Eve work together to secure the code. Athena, under Julian’s orders, tries to kill them both to obtain it. In the climactic battle, ENCOM’s team (including Seth, Ajay, Erin) hacks Dillinger’s servers, trying to block Athena from staying in the real world. Ares returns with the Permanence Code, which transforms his suit colors (red → white trim) signifying his more “human/mortal” status. He defeats Athena in a duel, and she derezzes. 

Julian, defeated, avoids authorities by digitizing himself into a damaged Grid. Meanwhile Eve remains with ENCOM, using the Permanence Code to do good—agriculture, medicine, climate resilience. Ares chooses independence, writing Eve a postcard from a café (“off-grid”), reflecting on his existence, and sets off in search of others like himself—namely Sam Flynn and Quorra. 

In the mid-credits scene, Julian awakens inside the Grid, picks up a glowing retro identity disc, and transforms into a new version of Sark (the original villain from Tron 1982). This establishes Julian as the next major threat.