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In the near future, humans are augmented with cybernetic improvements such as vision, strength and intelligence. Augmentation developer Hanka Robotics establishes a secret project to develop an artificial body, or "shell", that can integrate a human brain rather than an AI. Mira Killian, the sole survivor of a cyberterrorist attack which killed her parents, is chosen as the test subject after her body is damaged beyond repair. Over the objections of her designer Dr. Ouelet, Hanka Robotics CEO, Cutter, decides to use Killian as a counter-terrorism operative.

A year later, Killian has attained the rank of Major in the counter-terrorism bureau Section 9, working alongside operatives Batou and Togusa under Chief Daisuke Aramaki. Killian, who experiences hallucinations that Ouelet dismisses as glitches, is troubled as she doesn't clearly remember her past. The team thwarts a terrorist attack on a Hanka business conference, and Killian destroys a robotic geisha after the robot kills a hostage. After learning that the geisha was hacked by an unknown entity known as Kuze, Killian breaks protocol and "dives" into its AI for answers. The entity attempts a counter-hack, and Batou is forced to disconnect her. They trace the hacker to a yakuza nightclub, where they are lured into a trap. An explosion destroys Batou's eyes and damages Killian's body. Cutter is enraged by Killian's actions, and threatens to have Section 9 shut down unless Aramaki keeps her in line.

Kuze tracks down Section 9's Hanka consultant, Dr. Dahlin, and kills her. The team links her murder to the deaths of other senior company researchers and realize that Ouelet is the next target. Kuze takes control of two sanitation workers and sends them to kill Ouelet. Now with cybernetic eyes, Batou kills one while the repaired Killian subdues the other. While they interrogate the worker, Kuze speaks through him before compelling him to commit suicide. Togusa traces the hack to a secret location, where the team discovers a large number of humans mentally linked as a makeshift signal network. Killian is captured and Kuze reveals himself as a failed Hanka test subject from the same project that created Killian, where he urges her to question her own memories and to stop taking her medication as it actually helps to block her memories. Kuze then frees her and escapes.

Killian confronts Ouelet, who admits that 98 test subjects died before Killian, and that her memories are implanted. Cutter has decided that Killian is a liability and orders Ouelet to kill her after she returns to Hanka Robotics. Instead, Ouelet gives Killian an address and helps her escape. Cutter kills Ouelet, but blames Killian, saying that she has gone rogue. He informs Aramaki and the team that Killian must be terminated. Killian follows the address to an apartment occupied by a widowed mother, who reveals that her daughter Motoko Kusanagi ran away from home a year ago and was arrested; while in custody, Motoko took her own life. Killian leaves and contacts Aramaki, who allows Cutter to remotely eavesdrop on their conversation.