While on a vacation in Pokitaru, Ratchet and Clank meet a little girl named Luna who is writing a school report on heroes. Shortly after they meet her, Luna is kidnapped by mysterious robots. Clank then stumbles upon a mysterious artefact from an ancient race, the Technomites. Although Ratchet is initially sceptical about their existence, Clank believes they do exist. Ratchet and Clank set out to save Luna and, in the process, encounter Captain Qwark, who is attempting to find his biological parents. Ratchet allows him to use his ship's computer to aid in his search to make him stop following them.

On Kalidon, Ratchet is kidnapped by Luna, who faked her kidnapping, and Clank is left in a junkyard on Metalis. However, Clank transforms into his Ultra-Mech form and sets off to destroy enemy troops and save Ratchet. Meanwhile, Ratchet's DNA was taken to produce an army of clones. Emperor Otto Destruct, leader of the Technomites, has recognized Ratchet's potential and hopes to use his DNA to make the ultimate soldier. Finding out that Luna is actually a robotic puppet and ship, the duo track it down to Dayni Moon, where Luna reveals the clone plot to Ratchet and Clank and explains the Technomites are bitter for never receiving credit from the general population for their technological advances.

After destroying the Luna puppet, Clank tries to get the clone factory coordinates from it but is infected with a computer virus and malfunctions, allowing the Technomite soldiers inside the puppet to enter Clank. Ratchet uses his shrink ray to go inside Clank, meeting his internal security system, and they collaborate to eliminate the intruders and restart Clank's processor. Clank reveals that he obtained the factory coordinates before being deactivated, and they head to a planet known as Quodrona. After Ratchet kills dozens of clones, Otto reveals that what Luna told them was a "cheesy story", and his real plan is to steal the intelligence of every being in the galaxy, using a special machine that transfers the intelligence from one being to another.

Qwark, persuaded by Otto, thinks Otto is his father and temporarily fights on his side. Ratchet and Clank eventually beat Otto. Afterwards, they learn from Skrunch that Qwark's real parents had been killed by defective Technomite equipment. Qwark tries to use Otto's machine to give Otto his intelligence, but Skrunch interferes and causes Otto to gain his intelligence instead. Back in Ratchet and Clank's apartment, the shrunken Ratchet clones are sold as toys, and the two keep the shrunken Qwark company while watching an advertisement commercial for the new toy line.