The Corellian Corvette Tantive IV, with Princess Leia Organa aboard, is attacked and boarded over the planet Tatooine by the Imperial Star Destroyer Devastator. With capture imminent, Leia leaves the tape containing the Death Star's blueprints in the memory banks of Artoo-Detoo, only with a holographic message for Artoo to present to General Obi-Wan Kenobi, who lives on the planet below. Artoo, with Threepio in tow, takes an escape pod down to the planet's surface as Vader takes Leia captive. The 'Tantive IV' is destroyed, its crew all killed, and Vader takes Leia with him to the Death Star.

Far below, the battle was witnessed by moisture farmer Luke Skywalker, who hurriedly tells his friends at Tosche Station, only to have them miss the whole thing. One of his friends, recently returned from the Imperial Academy of Carida, is Biggs Darklighter. He tells Luke about his plans to join the Rebel Alliance, and asks Luke to come along. He refuses, caring too much for Uncle Owen Lars and Aunt Beru Whitesun - Lars to abandon them. Biggs leaves the planet to rejoin the Alliance.

Meanwhile, the bickering Threepio and Artoo have gone their separate ways. But they both get taken prisoner by the junk-scavenging Jawas, who travel to the Lars farm after noticing a signal flare. The Lars are in desperate need of new droids, and Threepio and R5-D4 seem just what they need. Only R5, after being told the situation by Artoo, blows his own motivator to allow Artoo to be bought instead. Luke cleans up the droids in the garage, where Artoo shows him a fragment of the holo-message - just enough to get him intrigued, and to remove the restraining bolt the Jawas put on him. As soon as he leaves for dinner, Artoo takes off for the Jundland Wastes.

Luke explains the situation to Owen and Beru at dinner. The over-protective Owen orders Luke to forget about the whole thing and get Artoo's memory erased. He also refuses to let Luke go to the Academy as promised, telling him he wants him around the farm for "one more season." Beru chides him for holding Luke back - there is too much of his father in him. "That is what I'm afraid of." Meanwhile, in the night, the Jawa sandcrawler is attacked by a group of stormtroopers....

Luke discovers Artoo's disappearance, but has to wait for morning to go after him in his landspeeder with Threepio. Just as they find him, they are set upon by Sandpeople - at which point Obi-Wan Kenobi appears, scaring them off. He takes the group to his cliff side hut, where he gives Luke Anakin's old lightsaber and gives him a slightly edited version of his father's past. After Artoo plays the whole message, Obi-Wan asks Luke to accompany him to Alderaan, where he will train him in the ways of the Jedi. Luke, still worried about his uncle and aunt, refuses. But he finds the choice taken out of his hands when they discover the smoking remains of the sandcrawler. Realising too late the danger they are in, Luke rushes back to the farm - to find smoking ruins and the charred skeletons of Owen and Beru. When he returns to Kenobi, he agrees to go with him.

Meanwhile, Vader has arrived at the nearly-completed Death Star. At a meeting of the Imperial heads there, Grand Moff Willhuff Tarkin announces that Emperor Palpatine has (under the pretext of Rebel insurgence) disbanded the Senate forever, putting COMPNOR in charge of the overall government, and Imperial governors in direct control of their territories. "The last remnants of the Old Republic have been swept away." An intergalactic reign of terror is about to begin, just as soon as they learn the location of the main Rebel base. Vader sets about doing this by drugging Leia and using hypnotic suggestion, including conjuring up mental pain, to force it out of her. Despite his best efforts, she will not break and tell them the location.

Kenobi and Skywalker (with the droids in tow) arrive at Mos Eisley, where they hope to find transport to Alderaan. One bar brawl later, they find it in the form of Corellian smuggler Han Solo, who agrees to take them there for 17,000 credits. He desperately needs the money, as shown when the Rodian bounty hunter Greedo informs him of Jabba placing a huge price on his head. When the impulsive punk tries to shoot Han, Han dodges and shoots him from under the table. He then has to reassure the Hutt that he will repay the huge debt incurred by dumping his Kessel Run spice, that all he needs is a little more time. Kenobi sells Luke's speeder (with a little mind trick persuasion) for 2,000, and joins Solo and the Wookiee co-pilot Chewbacca at Docking Bay 94. The Empire is on to them now, and a stormtrooper squad attacks as they board the Millenium Falcon. Dodging orbiting Star Destroyers, the Falcon escapes into hyperspace.

Fed up with Leia's stubbornness, Tarkin takes the now fully-operational Death Star to Alderaan, threatening to blow it to cinders if she does not tell them the location of the base. With no other choice, she tells the location - Dantooine. Tarkin then smugly vaporises her home world anyway, to provide a threatening example to the rest of the galaxy of the Empire's power. After scouts report Dantooine to be abandoned, he orders that she be executed.

After a trip of three and a half hours (during which Kenobi gives Luke the beginnings of Jedi training), the Falcon arrives at Alderaan - what is left of it. They are soon tractored into the Death Star, where Vader senses a strange, familiar presence nearby....

The heroes sneak their way into the station. Kenobi leaves the group behind, to take out the tractor beam holding them there. Just after he leaves, Artoo (having hacked into the main computer) reports Leia's presence. Luke and Han disguise themselves as stormtroopers (after Luke tells Han how rich the Princess is), and with Chewbacca sneaks into the detention area. After shooting up the place, they free Leia and jumps down a garbage chute. They fight their way back to the Falcon, facing a Dianoga, a trash compactor, an open chasm, and a ton of stormtroopers along the way.

Obi-Wan shuts off the tractor beam and makes his way back himself - only to find Darth Vader between him and the 'Millenium Falcon'. A fierce lightsaber duel ensues. However, when Kenobi sees Luke, Han, and Leia about to make a break for the ship, he willingly lays down his life, letting Vader chop him in half before Luke's devastated eyes to allow the escape. The Millenium Falcon fights off some TIEs and hyperjumps toward the Rebel base - which is just what Vader wanted. A homing device is on the smuggler ship, which will lead the Death Star to the Rebel base and secure the Sith's ultimate victory over the Jedi, the Republic, and the galaxy all in one day....

When the Millenium Falcon arrives at Yavin IV, Princess Leia decides it is time for the Rebels to make a stand. Using the plans in Artoo's memory, they locate a weakness in the design - a small thermal exhaust port. A direct proton torpedo shot down the shaft will blow up the main reactor and the station. But to do that, some 30 Rebel starfighters will have to face the best the Empire has to offer. And they only have 30 minutes to make the shot before the Death Star blows up Yavin IV.

Han Solo, thinking the attack a lost cause, takes his reward money and takes off. Luke volunteers to join the Red X-Wing squadron, where he is re-acquainted with Biggs. The attack begins, and the X-Wings and Y-Wings hold their own. But they are soon overwhelmed when Vader appears in his prototype TIE Advanced and begins shooting down every ship that nears the exhaust port. Soon, only Luke, Biggs, and Wedge Antilles are left. Wedge is damaged and knocked out of the fight, and Biggs is killed outright. Vader blows Artoo to bits, and prepares to finish this strangely strong in the Force pilot when -- Han Solo swoops in with the Falcon, shooting Vader off Luke's back. His conscience finally got the better of him, it seems. With less than a minute to go, Luke (using only the Force to guide him) nails the shot down the exhaust port. He, Han, Wedge, and Y-Wing pilot Keyan Farlander get clear as the Death Star turns into a mini-supernova. Vader also gets clear and flies back toward the Empire.

Back at Yavin, Artoo is repaired, and Luke and Han receive medals and a standing ovation from the Rebel Alliance. A bold new day has dawned. A new hope has arisen for the galaxy....

"They were in the wrong place at the wrong time. Naturally they became heroes."
-Leia Organa of Alderaan, Senator