South Africa, 2016: Johannesburg was in chaos as crime rates swelled. To combat this increase in violence, the South African police works with the arms manufacturer Tetravaal to supplement their law enforcement offices with robotic police droids, better known as "scouts". Developed by Deon Wilson, the scouts prove highly effective in fighting crime.
Deon's passion, however, is in developing artificial intelligence. For several months, he worked in his spare time to create an AI program that was capable of independent thought, able to form its own opinions and develop its own personality. One day, he finally succeeds in creating a stable AI program: all he needs a robot chassis to install the program on. The higher-ups at Tetravaal, however, have little interest in Deon's AI research and prohibit him from using a robot to test his AI program on. Undeterred, Deon decides to steal a scout that had been slated for decommission following a hit from an RPG, Scout #22, and use it for his experiments.
Unfortunately, on his way home with Scout #22, he is abducted by a trio of gangsters; Ninja, Yolandi, and Amerika. In debt to a notorious crime lord named Hippo, Ninja wants to pull off a heist to pay off Hippo. To that end, he kidnaps Deon in the hopes of forcing him to deactivate the scouts. When Deon explains that he can't turn off the scouts, they settle for another plan; rebuild the scout that Deon stole, install the AI program into it, and teach the robot to be a gangster who can help in the heist. Deon agrees to the plan on the condition that he can help bring up the robot.
Together, Deon and Ninja's gang rebuild Scout #22 and install the AI into it, using the "guard key" that Deon illicitly took to facilitate the firmware update with the AI. Once the installation is complete, the robot awakens. Initially fearful of the humans surrounding him, Deon and Yolandi both teach the robot its first words. As it begins to learn, Yolandi gifts the newborn robot with the name "Chappie". She becomes Chappie's "mommy", with Ninja as his "daddy".
Back at Tetravaal, Deon's rival Vincent Moore grows increasingly upset over the fact that his bosses favor Deon's scouts over his creation, a large brainwave-powered law enforcement robot named "MOOSE". When he goes to collect the guardkey to further his own agenda, he finds it missing. Suspicious, Vincent follows Deon to Ninja's hideout and discovers that he had taken the guardkey and a decommissioned scout to make Chappie.
Yolandi comes to see Chappie as a child of her own and tries to mother him. Ninja, however, grows impatient: he only has a few days to get Hippo his money, and Chappie's days are numbered due to his battery having fused with his chassis from the RPG impact. Ninja tries to force Chappie to learn to fend for himself by abandoning him with a group of criminals. When the criminals discover this robot cop is not so intimidating, they beat on Chappie until he runs away. Chappie then finds himself abducted by Vincent, who extracts the guardkey from his CPU so he can deactivate the scouts. Chappie manages to escape from Vincent, but loses an arm in the process and makes his way back to Ninja's hideout.
Chappie is on guard around Ninja afterwards, but Ninja manages to convince Chappie to forgive him. Afterwards, Ninja and Amerika both train Chappie on how to be a criminal. Chappie refuses to use firearms due to Deon's teachings, but they teach him to use bladed weapons to "put people to sleep", as well as how to hijack cars. As Chappie realizes that the battery that is fused into his damaged chassis is running out of power and that he would die if it ran out, Ninja and Amerika convince him to help them in their heist so they can use the money they would earn to buy him a new body. When Deon goes to check on him, Chappie angrily asks him why he used a body with a dying battery to give birth to him, and why he made him only to die. Deon honestly answers by saying that he had no idea Chappie would grow into the person he is today.
Back at Tetravaal, Vincent uses the guardkey he took from Chappie's CPU to upload his homemade "Genesis" virus to the scout network. As the virus makes its way through the network, all of the scouts suddenly deactivate, including Chappie. With the scouts that had kept Johannesburg's crime in check offline, the streets erupt into chaos and criminals take to the streets, rioting with no one to stop them.
Deon takes Chappie's body back to Tetravaal and manages to quarantine the Genesis virus, reactivating Chappie and halting Vincent's attempt to cover up his act of sabotage by trying to delete the virus. As they leave, Chappie finds the neural interface helmet used to control the MOOSE and takes it with him, intending to use it to transfer his consciousness to a new body before his battery dies.
The next day, while the other scouts are offline, Ninja's gang take Chappie with them to carry out the heist. As the news reports on one of Deon's scouts committing crimes, Deon discovers that Vincent uploaded the virus that deactivated the other scouts. As Vincent finally gets the approval he needs to launch the MOOSE, Deon makes his way back to Ninja's hideout to warn them of the coming danger.
As they make their getaway, Ninja finally admits to Chappie that he lied about using the money to give him a new body. Enraged, Chappie prepares to kill Ninja. Deon arrives shortly before Hippo and his gang, with Hippo intending to take the money and Chappie. A gun fight ensues, but is interrupted by the arrival of the MOOSE, who immediately kills Amerika and lays waste to Hippo's gang. Deon is mortally wounded by Hippo before Ninja kills him as Chappie sticks a bomb into the MOOSE's chassis. With Deon dying, Chappie intends to take him back to Tetravaal so he can transfer his consciousness to a new body. As they try to make their getaway, Yolandi distracts the MOOSE. Vincent turns his attention to her and shoots her to death. As he prepares to kill Deon, Chappie detonates the bomb and destroys the MOOSE.
As they make their way back to Tetravaal, Deon tells Chappie who was responsible for the death of his "mommy". Once inside Tetravaal HQ, Chappie pursues Vincent and brutalizes him, leaving him battered and bloodied, but alive. He then makes his way back to Deon, using the neural interface helmet Vincent used to control the MOOSE to transfer Deon's consciousness to a dummy scout body. With a new robot body, Deon then returns the favor, using the helmet to transfer Chappie's consciousness to a reactivated scout body. Together, they make their escape as the police swarm Tetravaal HQ.
In light of the scouts' sabotage, the Johannesburg police cuts off ties with Tetravaal and presses its human officers back into service as a manhunt is launched for Chappie. Meanwhile, Chappie launches a pet project of his own in the far reaches of the city; Yolandi had helped him experiment with copying one's consciousness using the MOOSE's neural interface helmet and had created a program containing her consciousness, which he kept on a thumbdrive. After hacking into Tetravaal's manufacturing plant, he constructs a new robot body, then uploads Yolandi's consciousness into it, so that he may reunite with his "mommy".
