Shao Kahn and his forces arrive on Earth, and Kahn announces the Earth will be destroyed in six days. He confronts and fights Rayden, but when he realizes he's in danger of losing, he takes Sonya hostage. Johnny tries to save her, but Kahn batters him aside and then snaps his neck, killing him. He and his generals -Ermac, Motaro, Rain, Sheeva and Kitana's resurrected mother, Sindel -all return to Outworld, whilst his extermination squads start running rampart across the Earth. Rayden and his fighters retreat. Rayden believes Kahn has cheated and broken the rules, allowing him to open portals to the Earth realm. He thinks Sindel is the key to all of this, and wants to reunite Kitana with her mother to close Kahn's portals forever. The group split up, with Liu Kang and Kitana being sent to find Nightwolf, whilst Rayden and Sonya go off to find Sonya's partner, Jax. They use things called velospheres to get around the Earth quickly.

In Outworld, Kahn is visited by his father, Shinnok. Shinnok is furious when he finds out that he let Rayden live, and tells his son not to underestimate the human spirit. Liu and Kitana are attacked by Smoke, a cyborg ninja. They are saved by Sub-Zero, but it's not the same Sub-Zero Liu fought in the tournament -it's his brother. Kitana convinces Sub-Zero to help them.

However, Scorpion appears. He fights Sub-Zero and almost makes him fall into a stream of lava, but Liu saves him. As Liu does this, Scorpion captures Kitana, and takes her to Kahn's fortress in Outworld. Sub-Zero takes this as a sign that Liu isn't ready to fight Kahn yet, and disappears. Meanwhile, Sonya arrives at the base Jax is at, and wakes him up. He's put cybernetic strength enhancers onto his arms, which turn out to be useful when an extermination squad invades the base, led by Cyrax. He and Sonya defeat everyone, including Cyrax.

Upon his defeat, they notice a tattoo of a dragon come to life and disappear. They have to run when they realize Cyrax is about to self destruct. Back in Outworld, Kahn finds out Rain allowed Kabal and Striker -two of Earth's best warriors -to live, and kills him. He has Sindel replace his as his top general. Meanwhile, Liu finds Nightwolf. Nightwolf attacks him in his wolf form, and says that was his animality. He wants Liu to discover his animality, and says he must pass three tests. He knocks Liu out by throwing a hatchet at him. Liu has a dream where he sees Kitana, Shan Kahn and others, and starts to undergo a change.

He wakes up and sees a woman who tries to kiss him, but he rejects her. The woman is Jade, who gets into a fight with him, but it turns out she was part of Nightwolf's second test. She says she can take him to where Kitana is, so Liu goes with her, despite not having taken the third test. Elsewhere, Sonya is attacked by Mileena, but she defeats her and notices the same dragon tattoo Cyrax had come to life and vanish. Rayden has gone to the temple of the elder gods, asking about how Kahn was allowed to invade Earth. The gods say that they don't control the destiny of man, and everyone possesses the ability to change their fate. They also say that only when Shao Kahn is destroyed will the future be safe. The gods then ask Rayden if he truly believes the humans are worth saving, and if he loves them enough to sacrifice his immortality for them.

Rayden does so, and leaves the temple, sporting a new look. Liu, Jade, Sonya and Jax meet him there, but Kahn leads an extermination squad towards them. Rayden uses what's left of his powers to open a portal, and the group enter Outworld. The realms have begun to merge, as Earth structures begin appearing in Outworld. Jade says she will lead them to Kahn's fortress, but they are then attacked by Sindel and some ninjas. Liu heads to the fortress, whilst the others remain behind to deal with Sindel. Liu enters the fortress via a hidden passageway Jade had told him about, and finds Kitana. He is attacked by Baraka and some other Tarkatan warriors, but he defeats them all. Sheeva then enters, but she is killed when Liu makes Kitana's cell fall on top of her.

Rayden's group defeat Sindel, and she is reunited with Kitana. Kitana says she's prayed for the day when their love will bring them together again. Sindel laughs at this, revealing that Rayden's plan hasn't worked. Jade reveals she is working for Kahn, and she and Sindel disappear. Sonya notices a dragon tattoo on Rayden's back, and realizes it's the same one Cyrax and Mileena had. Rayden reveals it's a family crest, allowing safe passage through the portals for the bearer and his passengers. He says the ones she saw earlier were temporary, so the bearers did not share his bloodline. Sonya wonders if it's Rayden's family crest, how can Kahn's side have it too? Rayden reveals that Shao Kahn is his brother! Back at the fortress, Kahn is angered that Jade failed to lead Rayden's group into an ambush, and has her killed.

Rayden says that years ago, his father decreed that his heir to the family throne must be strong enough to kill his own brother in battle. Rayden defeated Kahn, but could not bring himself to kill him then, and can't do it now. Liu asks what they can do, and Rayden says they'll do their best, as it's all that can be expected. The group head off to a temple where Kahn and his remaining generals are. Rayden confronts Kahn and Shinnok, but after refusing to join with his father, Kahn blasts him off the temple.

Rayden tells Liu he is proud to die as a human, and passes away. Jax, Sonya and Kitana fight Motaro, Sindel and Ermac, whilst Liu starts fighting Kahn. Jax and the others are eventually able to defeat their opponents.

Meanwhile, Liu and Kahn use their animalities to become massive beasts, and the battle continues. The two eventually fall off the temple, and revert to their usual forms. Shinnok decides to help his son, but is stopped by two of the elder gods, who tell him that the fate of the universe will be decided as it should be: in Mortal Kombat! Liu resumes his fight with Kahn, and eventually defeats him.

As Kahn collapses, a tattoo on his back comes to life, and Kahn's body melts away. Shinnok is taken prisoner by the elder gods, and suddenly everyone else is returned to Earth. The merger has failed, and everything has returned to normal. This includes Sindel, and Kitana is finally truly reunited with her mother.

The elder gods bring Rayden back to life, believing that it's only right that Shinnok's son be allowed to take his place in the eternal palace, as he's become one of them. Rayden tells everyone they've made him very proud, and he'll be watching them -so they should stay out of trouble. He wants them to be there for one another, as they're a family now. He then disappears, and Liu and the others walk off.

Notes

-This movie skips adapting the plot of the Mortal Kombat II game -which was basically a rehash of the first game anyway, so it was probably for the best. Instead, the movie adapts the plot of Mortal Kombat 3.

-Shinnok was a character who first appeared in Mortal Kombat Mythologies: Sub-Zero, and was also the final boss of Mortal Kombat 4. In the games, he's unrelated to Shao Kahn or Rayden, and looks completely different to his Annihilation counterpart.

-Robin Shou (Liu Kang) and Talisa Soto (Kitana) are the only members of the first movie's cast to reprise their roles in Annihilation. Keith Cooke, who played Reptile in the previous movie, plays Sub-Zero in this one.

-Other cast members from the first movie have spoken about why they didn't come back for Annihilation:
--Christopher Lambert, who played Rayden in the previous movie, was believed to be unavailable due to starring in AN adaption of Beowulf, which would be released in 1999. However, in later interviews, he has stated he didn't like the script, and so didn't want to be in the film.
--Linden Ashby, who played Johnny Cage in the first film, wanted to do the sequel. But his deal meant he would have gotten a pay raise to do it, and he believes this is why his character was killed off so early. He decided not to come back, and has made several critical (and justified) statements about the movie since, calling it stupid.
--Bridgette Wilson didn't return to play Sonya, it's believed it was because she had a role in I Know What You Did Last Summer.
--Chris Casamassa, who played Scorpion in the first film, wanted to reprise his role for Annihilation but wasn't available due to him doing stunt work in Batman & Robin.

-It was revealed by producer Lawrence Kasanoff that the movie was released unfinished. Feedback from audiences for a test viewing of the film was positive, so distributor New Line Cinema decided to release it as it was. Lawrence has stated that the film was still in need of a second pass for visual effects and editing, but this never happened. This is why the CGI in the film, especially for the animality stuff, looks so poor. It's also the reason for one of the film's more famous errors (see below).

-Cyrax, Mileena or Baraka are not named by anyone in the film, but they are named in the credits.

-The actress playing Mileena -Dana Hee -was also a stunt double for Kitana's actress, Talisa Soto.

-Marjean Holden, who played Sheeva, has said she was very upset with what happened to her character in the film. She has stated in an interview that Sheeva was meant to get some fight scenes, but they were all cut.

-The soul Ermac releases isn't named, but it's likely meant to be Noob Saibot, a secret character from the games who is entirely black.

-Quan Chi, another character from Mythologies and Mortal Kombat 4, was meant to appear in the film. The scene is believed to have been at least partially shot, but has yet to have been included on any version of the movie, and would have provided an alternate ending. After Liu and the others walk away from the temple, it'd cut back to a prison in the Nether realm. Quan Chi would find and free Shinnok, and Shinnok would tell him that together, they would be unstoppable. The film would then end on them laughing.

The above image is believed to be from the cut scene. The actor playing Quan Chi was just an extra who couldn't speak English, but this didn't matter since Quan Chi only had to laugh in this scene.

-The deleted scene mentioned above would have set things up for another sequel, called Mortal Kombat Devastation. However, this sequel was never made due to the poor box office performance of Annihilation. A new live action film would finally be released in 2021, which rebooted the series.

Errors

-Sonya is wearing a completely different outfit at the start of this movie when compared to what she was wearing at the end of the previous one.
-Rayden initially has long hair, but when he starts fighting Kahn, his hair is suddenly tied in a pony tail. He goes back to having long hair after the fight.
-When Kahn says "you will never win" his mouth clearly isn't moving.
-Nightwolf says there are three tests, but Liu only takes two of them -the first one is courage, and Jade implies she was part of the second test. The third test is never taken.
-Due to an editing error, the shot shown for a Tartakan warrior falling into the pit actually shows Rain instead. It seems this was from an alternate take, as the shot shown here is different to the one showing Rain's death earlier in the film. Odder still, if you look at the bottom, someone's hand comes up to catch the actor's body!
-When the heroes get to Outworld, Sindel and three ninjas appear. Rayden gets into a fight with two of the ninjas, but what happened to the third one? He perhaps tried to help Sindel, but it's not clear.
-When Motaro shows Kahn that he's ripped one of Jax's cybernetic arms off, Kahn is suddenly wearing his cape again during the shot of him saying "yes!".
-During this shot, Shinnok is suddenly missing between the two elder gods.