Hugh Jackman) is a former boxer who attempts to get money in illegal boxing matches between robots to pay his debts to loan sharks. During a fight, Charlie's robot, Ambush, is destroyed by Black Thunder, a bull belonging to Ricky (Kevin Durand). Having made a bet that Ambush would win, Charlie now owes Ricky $20,000, which he doesn't pay before leaving.
While leaving, Charlie is informed that his ex-girlfriend has died, and he has to attend a meeting to decide the fate of his 11-year-old son Max (Dakota Goyo). Max's aunt Debra (Hope Davis) and uncle Marvin (James Rebhorn) want full custody, and Charlie gives it to them in exchange for $100,000 from Marvin, $50,000 of in advance, on the condition that Charlie takes care of Max for three months, while Marvin and Debra are away on a second honeymoon.
Charlie and Max meet with Charlie's friend Bailey Tallet (Evangeline Lily), who runs the boxing gym of her deceased father, Charlie's old coach. There, Charlie buys a secondhand Japanese robot, Noisy Boy, and arranges for it to fight the illegal circuit's champion, Midas, at a venue belonging to his friend Finn (Anthony Mackie). Partly due to his inexperience with the robot, Charlie ends up losing control of Noisy Boy and Midas destroys it.
Charlie breaks into a junkyard with Max to steal scraps that he can use to put a new robot together. There, Max falls over a ledge, where he is saved from doom after being snagged by a lodged and buried robot arm. After Charlie pulls him back up, Max uncovers the entire robot, called Atom. On Max's insistence, Charlie takes it back to Bailey's gym, where they discover Atom is a sparring bot that can sustain massive damage, but isn't able to deal out much damage. Max convinces Charlie to get Atom a fight, and upgrades him to take vocal commands using spare parts from Noisy Boy and Ambush.
Charlie and Max take Atom to fight an unsanctioned outdoor match against a robot called MetroSexual, and Atom wins, earning back some of Charlie's money. Atom's string of subsequent wins attracts the attention of a promoter from the World Robot Boxing league (WRB), who offers Atom a professional fight against a robot called Twin Cities. Charlie accepts, and Atom wins again, thanks to Charlie's knowledge of boxing, which allows him to locate a design flaw in Twin Cities. Taking advantage of Atom's subsequent novelty attention, Max challenges WRB champion Zeus, designed by arrogant genius Tak Mashido (Karl Yune) and sponsored by rich Russian Farra Lemcova (Olga Fonda), who accepts, but first tries to buy the upstart Atom.
As they leave the Twin Cities fight, Charlie is attacked by Ricky and his men, who beat him severely, assault Max and steal their money. Feeling guilty, Charlie returns Max to his aunt and uncle so he can protect them, but Bailey convinces him he can be a better father to Max. Convincing Aunt Debra for one more chance, Charlie takes Max to the Zeus-Atom match, Zeus severely damages Atom — while also getting injured, a first for Zeus. In the last round of the five-round match, Atom's vocal receptors are damaged, and he has to fight in shadow boxing mode, copying Charlie's moves from the aisle. After Zeus runs very low on power, Atom begins to heavily damage Zeus, but doesn't win before the round ends, forcing the judges to declare a winner on points. They favor Zeus, but his reputation is tarnished, and Atom has become famous as "The People's Champion."