In a dystopian future, the city of Detroit, Michigan is on the verge of collapse due to financial ruin and unchecked crime. The city brings in the mega-corporation Omni Consumer Products, or OCP, to solve the problems. OCP promptly privatizes the police force. It is quickly revealed, however, that the senior executives of OCP, acting covertly, created most of the city's problems. OCP makes plans to destroy "Old Detroit" to replace it with the utopia of "Delta City."
The OCP Chairman (Dan O'Herlihy) recognizes that the human law enforcement is insufficient to stop the crime spree and seeks other opportunities. Senior President Dick Jones (Ronny Cox) offers a "law enforcement 'droid," the ED-209, but when the demonstration kills one of the other executives, the President of OCP turns instead to the "RoboCop" program to create an augmented cyborg, led by junior executive Bob Morton (Miguel Ferrer). Jones becomes bitterly jealous of Morton, as Bob Morton's accomplishment with Robocop allows him to move up on the ladder of success in the OCP ranks.
Veteran police officer Alexander James Murphy (Peter Weller) is transferred to a new precinct and partnered with Anne Lewis (Nancy Allen). On their first duty, they chase down a team of criminals led by crime boss Clarence Boddicker (Kurtwood Smith) to an abandoned steel mill outside town. Murphy and Lewis separate, and Boddicker's men capture Murphy, sadistically murdering him by shooting him many times with shotguns before running off. Murphy is pronounced dead at the hospital, but OCP takes his body and uses it to create the first RoboCop. RoboCop is guided by four Directives in his programming, to:
Serve the public trust
Protect the innocent
Uphold the law
He is able to single-handedly deal with much of the violent crime in the city, causing the rest of the police force to become worried they may be replaced. However, RoboCop still retains memories of his life as Murphy, including brief glimpses of his wife and son, and the action of spinning his gun before holstering it, a trick Murphy had done for his son. Lewis recognizes these elements from Murphy's mannerisms, and tries to learn more from RoboCop, but he remains silent on the issues. Because of Robocop's success, Morton is promoted to become one of OCP's Vice Presidents.
Morton's success and arrogance leads Jones to have Boddicker, secretly in his employ, kill the junior executive. An armed gas station holdup by one of Boddicker's men allows RoboCop to track down Boddicker to a cocaine bunker. RoboCop bursts into the facility and a shootout between him and the bandits ensues. RoboCop then apprehends Boddicker and forcefully makes him reveal his alliance with Dick Jones. RoboCop then visits Jones at his offices at OCP, showing him Boddicker's statement and prepares to arrest Jones. However, as RoboCop does so, the classified Fourth Directive activates, which prevents RoboCop from acting against any senior executive of OCP. Jones boasts to RoboCop about the Fourth Directive, which he added, and his role in Morton's murder, and then sends an ED-209 against RoboCop. It quickly becomes evident that OCP's technical prowess is no match for its ambition. RoboCop, handicapped by a poorly designed neural network, foolishly engages the behemoth. The ED-209, though armed with high-caliber weapons and an impressive voice, proves incapable of navigation outside of a corporate board room. In the end, RoboCop is saved not by his honed reflexes, but by forward-thinking city planners, who, in better days, required that OCP's headquarters contain emergency exit stairwells at both the north and the south end. RoboCop ducks into one of the stairwells for cover. The ED-209, incapable of movement along a vertical axis, plunges three or four feet down the stairs to its untimely demise. When Robocop gets outside, the police SWAT team is waiting for him with orders from OCP to destroy him.
Though RoboCop is severely damaged, Lewis rescues him. Later, Lewis tends to RoboCop's injuries at the same steel mill where Murphy was killed, and discovers that there is still some of Murphy present despite the cyborg augmentation. Meanwhile, the police launch their long-threatened strike, sending the city into chaos. Jones arranges for Boddicker and his men to be released from prison and funds them with new cars and Cobra Assault Cannons capable of puncturing RoboCop's heavy armor. With a tracking device, Boddicker's team converges on the steel mill. RoboCop and Lewis defend themselves and kill the whole gang, but Lewis is severely wounded at the end.
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RoboCop returns to OCP headquarters and uses one of the Assault Cannons to destroy the ED-209 guarding the building. Arriving during the middle of an executive board meeting with the president, Jones, and other executives, RoboCop plays back Jones's confession to Morton's murder. Jones quickly grabs a gun and takes the president hostage, but RoboCop, bound by the Fourth Directive, cannot take action against him. The president, in response to being taken hostage, fires Jones, invalidating his protection under the Fourth Directive. After thanking the president, RoboCop promptly shoots Jones, who then falls out the window to his death. As the board room recovers from the crisis, the president commends RoboCop for his shooting and asks for his name, to which he replies, "Murphy". Then he smiles and walks away.