New York City. The Mutant Registration Act created by Senator Chester is approved by the Senate and put into action by CIA agent Peter Gyrich. The mutants captured by him are taken to the Compound, a secret military facility where they are studied by Dr. Bolivar Trask, who intents to use their blood to create an army of supersoldiers for the american government.
Canada. Logan AKA "Wolverine", a secret agent of Department H, prevents a mobster from selling a lethal biological weapon to terrorists. Following this, he tells his superior, James Hudson, that he'll be taking a leave of absense to try finding answers about his past, which he can't remember. All that he knows is that he was found by Department H living in the canadian wilderness, among a pack of wolfes, six years prior.
Kansas. Fred Dukes AKA "Blob", the main attraction of a circus' freak show, is approached by two governmental agents who intent to arrest him. He is saved by Erik Lensherr AKA "Magneto", Victor Creed AKA "Sabretooth" and Mortimer Toymbee AKA "Toad" and joins Magneto's Brotherhood of Mutants. Sabretooth, Toad and Blob then attack the undergroun mutant prison The Vault, in Ryker's Island, and free Cain Marko AKA "Juggernaut". On their way out, they're surprised by the arrival of the X-Men - Scott Summers AKA "Cyclops", Jean Grey AKA "Marvel Girl", Bobby Drake AKA "Iceman", Hank McCoy AKA "Beast" and Warren Worthington III AKA "Angel". They fight, but the X-Men lose and return to their headquarters, Xavier's School for Gifted Youngsters, where they meet their leader, Professor Charles Xavier, who claims to have a mission for Cyclops and Jean.
They travel to Wolverine's cabin in Canada to invite him to join the X-Men, as Xavier knows that Magneto will extent the same offer. Wolverine refuses and they leave. Later on, he receives a letter from Sabretooth, inviting him to meet at Niagara Falls. Sabretooth was once Wolverine's partner, but, one day, he decided to kill Wolverine's girlfriend, Blackfoot indian Kayla Silverfox, and they became enemies ever since.
At a restaurant, they meet and Sabretooth offers Wolverine a place in the Brotherhood. He refuses and they fight. Wolverine loses and is thrown into the Niagara Falls, but survives and makes his way to the X-Mansion in order to join the X-Men and get revenge against Sabretooth. Meanwhile, Blob and Toad ambush Senator Chester's airplane and make it crash-land in the woods, killing him. Gyrich is called to investigate the attack.
Wolverine is introduced to the X-men, strikes a rivalry with Cyclops, is attracted by Jean Grey and befriends Iceman. He participates of training sessions in the Danger Room and Professor Xavier and Jean one day read his mind. They discover that he was a agent of the canadian government that was kidnapped by Department H and went trough Adamantium skeleton coating at the Weapon-X program created by Hudson. To make things worse, the very few memories Wolverine has of his life before being "found" by Department H turn out to be memory implants. He's furious.
Shortly thereafter, Xavier and Beast go to the city to investigate a terrorist attack that Xavier knows was made by Magneto. The X-Men are, at this point, oblivious to his existence. There, they are ambushed by Gyrich, who captures Beast and takes him to the Compound. Meanwhile, Xavier is found by Magneto and taken to the torch of the Statue of Liberty, where he is told that Magneto will soon turn New York into "the land of tolerance" once more. Xavier is left alone and, after making his way back to the mansion, he tells the X-Men about Magneto and the Brotherhood and gives Angel a tracking device that can locate Magneto.
Angel uses it and locates the Brotherhood's headquarters. However, feeling overshadowed after Xavier told him that he's not useful in a fight for being only capable of flying, Angel tries to aprehend the Brotherhood alone after sending the other X-Men a signal and is overpowered by Sabretooth, who rips his wings off. The X-Men find him and take him back to the mansion. Meanwhile, Beast escapes the Compound and also makes his way to the Mansion only to discover that there's a tracking device in his should.
Gyrich and Trask circle the area alongside soldiers. Three Sentinels created by Trask attack the mansion. Xavier destroys one with the mansion's defensive system, Iceman destroys the other with a ice spear to the head and Wolverine and Cyclops double-team to destroy the last one while Beast cares for Jean, who was wounded in a explosion. Gyrich and his men are rounded up by Xavier, who wipes their minds of the Mansion's location and the X-Men's identities and leave them in a truck stop in New Jersey.
Meanwhile, the Brotherhood acts. They flood the tunnels of the city with water, block the subway lines, set all the tunnels on fire and destroy most of the bridges. Magneto announces that New York now belongs to mutants and mutants only. All human beings must leave in seven days. All mutants are welcome. They won't strike other cities if other cities don't strike at them. The human exodus begins.
The X-Men see the news, enter the X-chopper and head to New York City. Xavier stays behind caring for Angel. They land outside the Chrysler Building, where Magneto lives. The Brotherhood confronts them. Magneto uses his powers to convoke a storm to sharp metallic objects upon the X-Men, who take cover in the sewers and split. Beast and Toad fight. Jean steps in and knocks Toad out. Blob and Iceman fight. Blob is defeated and left in a ice block. Wolverine and Sabretooth fight. Sabretooth is zapped by eletricity and escapes, with Wolverine in pursuit. Cyclops fights Juggernaut and Magneto, but is overpowered and the X-Men arrive to help him. Working together, they take out Juggernaut, but are overpowered by Magneto. Wolverine decides to let Sabretooth go for the moment and help the X-Men. He wounds Magneto. The X-Men combine their powers, lauching all they have against Magneto and knocking him out. The Brotherhood is defeated.
Magneto, Juggernaut, Toad and Blob are left for the military to find and arrest. However, Gyrich and Trask still claim to the public that the X-Men were aiding the Brotherhood and that a combined military effort allowed Magneto and his minions to be captured. At the X-Mansion, The X-Men celebrate their victory. Angel is awaken and recovering, but his wings won't grow back.
After dinner, Wolverine says goodbye to the X-Men. Him and Cyclops are friends. Jean is also very fond of him as a brother. He says that after he's done with Sabretooth, Hudson and Department H, he'll return. They promise the wait. And thus, Wolverine leaves as the X-Men look on.
