At night, several power company technicians answer a call at Charles Graiman's home. He is suspicious, as he did not expect them until the next morning. They threaten his daughter if he does not cooperate, and Graiman suffers a fatal heart attack. Searching his home for hard drives containing the information they are after , they stumble across a parked Ford Shelby GT500KR Mustang that they unsuccessfully try to stop.
Mike Traceur , a 23-year-old ex-Army Ranger, is awakened by his friend Dylan Fass to deal with two men who are attempting to collect a $90,000 gambling debt. Traceur's car breaks down when he attempts to flee, and the men threaten Fass's life if Traceur does not pay the debt.
FBI agent Carrie Rivai receives a call that Graiman, her longtime friend, is dead and leaves her date, a woman she met the night before, to investigate.
Sarah Graiman , a 24-year old Ph.D. candidate at Stanford University, lectures a class on nanotechnology. After the lecture she receives a phone call from KITT warning her about the men planning to abduct her. Her pursuers catch her, but KITT rescues her. Sarah and KITT track down Traceur, who turns out to be her childhood friend, and whom she was involved with has not seen since he left home at 18. They find him at the Montecito Casino, playing poker to repay his debt. He is resistant when Sarah asks for help, but agrees when she offers to pay his debt. The two set out to find out what happened to Graiman, and discover who is after them.
Rivai arrives at Graiman's home, and is asked by the local sheriff to identify the body. She discovers it is not Charles Graiman; the real Graiman escaped through the woods and left a double behind. Graiman makes his way to the home of Traceur's mother, Jennifer . The two leave for a motel.
The men chasing them are mercenaries for BlackRiver, a security contractor. They are after Prometheus, a system that controls the entire United States defense network. Information needed to control the system is contained on Graiman's hard drives in the mercenaries' possession, but is encrypted; only Graiman and Sarah know the encryption keys. KITT also possesses the data and can access the system.
Graiman contacts Sarah and asks her to meet him at the motel. He advises Sarah to contact Rivai for help. When she does so, Rivai puts her phone in speaker-mode so the sheriff can hear the location, unaware that the sheriff is working with the mercenaries.
KITT, Sarah and Traceur find the men have reached the motel, but have not found Graiman, as he checked into four different rooms. Using KITT's infrared sensors, Traceur finds Graiman and his mother and rescues them. Jennifer and Graiman reveal that Traceur's father was a man named Michael Knight and that he drove the first KITT, forcing him to stay away from his family. Traceur is absorbing this information when they reach KITT and find one of the mercenaries hacking into his system. Graiman asks KITT to shut down to prevent further infiltration, and suggests Traceur drive the car manually.
As the group is leaving, the mercenaries find them, shooting and kill Jennifer. Graiman is taken away and the other two are left to kill Traceur and Rivai and watch over Sarah and KITT. Traceur and Rivai overpower them, and Traceur and Sarah take KITT to chase after Graiman, while Rivai stays with Jennifer's body.
Traceur and Sarah discover KITT's vulnerability to damage, due to the loss of his self-repair capabilities while his system is deactivated. After exchanging fire, Traceur reactivates KITT with just enough time to activate his armor without allowing the mercenaries to hack into him, and turns KITT directly into the mercenaries' path, causing a collision. KITT survives with no damage, while the mercenaries' SUV is heavily damaged. Graiman survives while his captors are mortally wounded or dead.
On the way to Jennifer's funeral, Graiman reveals that he's re-forming the Foundation, and offers Traceur the chance to drive KITT, which he refuses due to philosophical differences, saying "I just don't believe in the same things you do."
At the funeral, Traceur meets Michael Knight , who tells him what Wilton Knight once told him on his death-bed—that one man can make a difference, and that he was that man. They shake hands and as Knight prepares to leave, Traceur asks if they will ever meet again, to which Knight responds, "I hope so."
Traceur is behind KITT's wheel in an enclosed area. Rivai, Graiman, Sarah and Fass bid him farewell and inform him of his mission. Sarah kisses him goodbye, and a door opens behind him that shows a moving road. KITT drives out in reverse. The door is the cargo hatch of a C-130 Hercules cargo plane, which then takes off. Mike switches to manual at KITT's indignation, turns KITT around, and drives away.
