A spacecraft flies near Earth and releases an object which enters the atmosphere. Some time later, in a Central American beach, former U.S. Army Special Operations soldier and Vietnam veteran "Dutch" and his elite mercenary rescue team — Poncho, Billy, Mac, Blain, and Hawkins — are tasked by Dutch's former commanding officer, General Philips, with rescuing a Honduran cabinet minister and his aide held hostage by Cinchoneros hiding in the jungle. CIA officer Dillon, an old friend of Dutch's from the Vietnam War, is assigned to accompany the team over Dutch's objections.
The team discovers the wreckage of a helicopter and three skinned corpses, identified by Dutch as Green Berets out of Fort Bragg that he knew personally. Dutch's team reaches the enemy camp and kills all of the guerrillas, including Soviet intelligence officers. Confronted by Dutch, Dillon admits the mission was a setup to retrieve intelligence from captured operatives, and that the dead Green Berets disappeared weeks earlier in a failed rescue.
After capturing Anna, the only surviving guerrilla, the team proceeds to its extraction point, unaware that they are being tracked with thermal imaging by an unseen observer. Anna escapes and is chased by Hawkins, but they are ambushed by a cloaked creature. It spares Anna, but kills Hawkins and drags his body away. Dutch organizes a search for Hawkins' body, during which the creature kills Blain. Enraged, Mac initiates a firefight that wounds the creature, revealing luminescent green blood. The unit regroups and realizes that something in the jungle is stalking them. Dillon believes more guerrillas are responsible, but Billy is adamant that the perpetrator is not human, an assertion that is met with skepticism. The team makes camp for the night, setting traps in all directions.
That night the traps are set off, and Mac kills a wild pig, mistaking it for the creature. In the confusion, the creature steals Blain's body and Dutch realizes that their enemy uses the trees to travel, making their traps ineffective. A second attempt to capture the creature using a net momentarily succeeds, but it escapes easily, leaving Poncho injured. Mac and Dillon try to pursue it, but the alien outmaneuvers and kills them. The creature then catches up with the others, killing Billy and Poncho and wounding Dutch. Realizing the creature does not target unarmed prey because there is "no sport" in it, Dutch sends Anna to the helicopter unarmed. The creature pursues Dutch into a river and moves within a few feet of a mud-covered Dutch. His thermal signature reduced, Dutch remains unseen by the creature and it moves on. Dutch realizes he can use mud as camouflage.
While the creature collects trophies from the dead soldiers, Dutch crafts traps and weapons and lures the creature to him. He disables the creature's cloaking device and inflicts minor injuries, but falls into the water, losing his mud camouflage. Acknowledging Dutch as a worthy foe and wishing to fight him on equal terms, the creature discards its mask and energy weapons and engages Dutch in hand-to-hand combat. Dutch is almost beaten but manages to crush the creature under a trap's counterweight. As the creature lies dying, Dutch then asks the question "What the hell are you?" to which the creature replies back to him the same question as well and then it activates a self-destruct device and begins laughing madly with Billy's voice. Realizing what the creature has done, Dutch runs from it as quickly as he can. He manages to take cover just before the device explodes and is later rescued by Philips and Anna with a helicopter.
Arnold Schwarzenegger as Major Alan "Dutch" Schafer
Carl Weathers as Dillon, Dutch's war buddy and a CIA operative
Elpidia Carrillo as Anna, a female insurgent
Bill Duke as Sergeant Mac, Blain's friend
Richard Chaves as "Poncho" Ramírez, an explosives expert
Jesse Ventura as Blain, a commando who fights with a minigun
Sonny Landham as Billy, a tracker and scout
Shane Black as Hawkins, a radioman
R. G. Armstrong as Major General Philips
Kevin Peter Hall as The Predator / Helicopter Pilot
Peter Cullen supplies the Predator's voice, credited as providing vocals (noted as "Vocalizations By") in the staff roll.
Sven-Ole Thorsen as Soviet military adviser (in an uncredited role)