Set in an undeterminate year of the near future in South Africa, Johannesburg is the first city to use a robot police force. Tetravaal is the company that develops and supplies the robots to the city. The deployed robots are called Scouts. Created by Deon Wilson (Dev Patel) these robots are completely automated and have artificial intelligence. Deon's office rival Vincent Moore (Hugh Jackman) has created The Moose (basically ED-209 from Robocop), which is operated remotely by a human. Moore isn't a big fan of Deon's work.
Scout unit 22 is back in the shop again. It seems this particular unit is accident prone and is always getting serviced. The techs get it back into action and send it out into the field where it assists in a police raid on a drug deal gone bad. On one side of the drug deal are Ninja and Yolandi, members of the real world South African band Die Antwoord. They're playing characters named Ninja and Yolandi (same as their own real names). They're teamed with Amerika (Jose Pablo Cantillo).
They're trying to deliver goods to crime boss Hippo (Brandon Auret). Hippo demands that Ninja, Yolandi and Amerika pay him $20 million within 7 days. During the meeting, the police and Scouts raid. Ninja, Yolandi and Amerika manage to escape during the police raid. Hippo shoots a rocket launcher into Scout 22's chest, seriously damaging it. Hippo also manages to evade the cops. After the raid, Yolandi has an idea that the scouts are probably like a television, so they must be able to be turned off by a remote control.
If they can find out how to do that they won't have to worry about these effective weapons. Moore asks Tetravaal's boss Michelle Bradley (Sigourney Weaver) for more money to assist with further developing his Moose. Deon's robocops are such a hit that the government has decided to sink more money into that project, and ordered 100 more of them, and has no interest in the Moose. Back at the shop at Tetravaal's headquarters, the technicians see that Scout 22's battery is fused with his chest piece, so he's beyond repair. They set him aside to be scrapped.
Hippo calls the gang and tells them that he's not dead or in jail, and he still expects them to pay him the $20 million they owe him. Ninja, Yolandi, and Amerika believe they need to conduct another heist to get the money for Hippo. Deon goes home, which has several artificial intelligence robot pets, and starts working on his newest project, which is creating an artificial consciousness for the Scout units. After a long night of programming and Red Bull, he succeeds.
Ninja's gang sees a TV news story and learns Deon is the mastermind engineer behind the Scouts, so he must be the guy who knows how to power them off. Deon asks Bradley if he can use his artificial consciousness program on the scrapped 22 unit. He explains that it's possible that this could create a robot smarter than humans and it could even conceivably write music and poetry. She explains that they're in the business of defense and not in the business of creating poets, so she denies his request citing insurance, red tape, and paperwork.
Deon decides to take a chance, gets the scrapped 22 and the Guard Key, which is needed to update the programming in all the robots as a precaution against hackers, and smuggles them out of the factory. Ninja's gang kidnaps him before he can get home. Moore, in a meeting with Ms. Bradley and a committee, tries to convince them that the moose is a better weapon than the Scouts, but they turn him down saying that the moose is big, expensive and ugly.
The gang (Ninja, Yolandi, and Amerika) takes the kidnapped Deon back to their base/hideout and ask him how to shut down the Scouts. He says it's impossible. They're about to kill him, but discover the Scout 22 unit in the back of his van. They put a gun to his head and force him to agree to program it to work for them. He assembles it for them, explaining that if his program works, it can be taught. He installs the new software into the unit and Scout 22 "awakens" and has the personality of a scared child.
Yolandi takes on an immediate mother-role and tells him that he's a happy chappie and names him Chappie. They let Deon leave, but he asks to come back to check on the progress. He also tells them that because of the fused battery, Chappie has only about five days to live. Moore wants to work on his Moose, but discovers that the Guard Key is missing. His computer tells him that the guard key is installed in Scout 22 and he knows that Deon must have taken it. The next day Yolandi and Amerika start teaching Chappie how to talk.
Ninja gets mad that because he needs Chappie trained to help them to do one more heist so they can pay back Hippo. Ninja starts to train Chappie to shoot guns but gets very frustrated because Chappie is a slow learner. At work, Moore puts his gun to Deon's head and tells him to return the guard key. Deon refuses and Moore pulls the trigger but it merely clicks and Moose pretends it as a joke. Back at the hideout, the gang teaches Chappie some more words, including tough gangster talk and profanity.
Deon leaves work to check on Chappie. He's mad that the gang is turning him into a foul mouthed thug, so he asks Chappie to promise not to count drugs, commit crimes, or do anything illegal. Moore follows Deon to the hideout in hopes of finding out where Deon is keeping the guard key. Ninja returns and threatens to kill Deon again for interfering with his plans. Yolandi say to let Chappie be a kid but Ninja says that he needs Chappie to be ready within 5 days to pull the heist to repay Hippo (or else Chappie will "die").
Moore leaves without interacting with any of these tough characters. Ninja and Amerika take Chappie to the middle of a rough area and leave him there as a test to see if he can toughen up and defend himself. The locals start attacking him with rocks, pipes, and flammable chemicals, but because Chappie promised Deon he wouldn't do anything bad, he doesn't fight back. He manages to run away and escape. In a van, Moore tracks the escaping Chappie and locates him. Moore deactivates Chappie with a battering-ram-looking electronic device.
They take him into the van and cut off his arm and remove the guard key. They were going to chop him up into more pieces but Chappie fights back and manages to open the doors and escape out the back of the moving van. Moore says they can let him go now because he is crippled because he's missing the guard key and can't learn anymore. Chappie makes his way back to the gang hideout. Yolandi is angry that Amerika and Ninja endangered Chappie. Amerika and Yolandi fix him back up by attaching a new, spare robot arm.
Yolandi reads Chappie bedtime stories and tells him that he has a soul inside and "that's what Mommy loves." Ninja and Amerika figure out a way to trick Chappie into helping them. Together, they steal cars so they can get money to get weapons so they can do their big heist. Once they have enough money, they go to a crazy looking tall, round apartment building, not completely unlike the building in Dredd. When they get there, a dog fight is taking place.
The criminals there see the Scout (Chappie) and scurry away, thinking he is a police scout on a raid. Chappie and Ninja go up to see the arms dealer Pitbull (Johnny Selema) and buy explosives, weapons, and Sony Playstation 4's. When they return, Chappie is trying to nurse a dead dog back to health. Ninja explains to him that in life you can either end up as the dead dog, or as the winning dog. He must fight if he's to be like the dog that survives. He also tells him that his battery can't be fixed because Deon made him to die.
But if he helps them with their heist, they'll be able to buy him a new body. Chappie goes along with the idea because he doesn't want to die. Deon returns to the gang hideout and is disappointed that Chappie is out doing illegal stuff with Ninja and Amerika. Yolandi tells him that he should leave because Ninja will kill him if he finds him there. Chappie, Ninja and Amerika return. While the two are alone, Deon tries to reason with Chappie, but Chappie tells him that he's angry that Deon didn't tell him that he was going to die in a few days.
Chappie tells Deon that he wants to live and stay with "Mommy" (Yolandi) and not die. Back at Tetravaal headquarters, Moore, plugs the guard key in and installs new firmware, genesis.dat, that remotely disables all scouts around the country. They fall to the ground wherever they are. The criminals realize this and pummel any Scouts they see. Thousands of crimes all over Johannesburg are now being committed since the Scouts have been shut down. Total chaos and viciousness rule the city.
Deon loads the deactivated Chappie back into the van and returns to Tetravaal headquarters. Deon finds the Guard Key in Moore's computer and reverses the genesis firmware update that Moore remotely installed into all Scouts, and brings Chappie back to life. However Chappie knows he is still going to die in a few days and says he wants to be transferred into a new robot body that is hanging there. Before they escape, Chappie sees The Moose robot.
Deon explains that The Moose is controlled by transferring a human operators consciousness into The Moose via a control helmet. Chappie steals the helmet and they go back to the gang hideout. The gang has Chappie help them rob an armored car, and it is covered live on the news. Hippo and his gang are watching. In the escape from the armored car heist, Chappie asks about his new body, now that they have money.
Ninja lets on that it was all lies that he needed Chappie just for the heist, and that there would be no new body for Chappie, who would still die in a few days. Chappie is furious. At the gang hideout, Deon says that a threat is coming (meaning Hippo) and Chappie must be prepared to fight. He shows Chappie a gun but Chappie refuses to use it. Chappie rigs up Yolandi's laptop and all the PS4s to create a super computer. He tests the helmet out on Yolandi and it works!
Moore tries to convince Ms. Bradley that since all the Scouts have broken down that they are defective and that she should enable him to proceed with the Moose program instead of the unreliable Scouts. Moore also convinces Bradley that Deon is the cause of the Scout robots committing crimes. Bradley gives Moore authorization to use The Moose to combat the crime and track down Deon. Hippo's gang shows up at Ninja's gang's hideout. He now wants Chappie for himself after seeing it on TV during the armored car heist.
Back at Tetravaal headquarters, Moore remotely pilots a flying Moose to Ninja's hideout to obliterate them all. A three way fire fight breaks out. The Moose steps on Amerika and rips him in half and flings him against a building. Moose starts indiscriminately shooting at everyone. Moose fires cluster bombs at Hippo's gang and kills them all except Hippo himself. Chappie attacks Moose. He is no match for Moose's awesome firepower but is able to jump on the Moose and attach a bomb.
Hippo shoots Ninja and Deon but then Hippo is killed by Ninja with a shovel. Ninja taunts Moose so that Deon, Yolandi and Chappie can escape in the van back into their hideout building. The Moose is about to take out Ninja, but Yolandi surprises it by launching a rocket at it. The rocket is ineffective and Moose turns and shoots Yolandi dead. Chappie jumps back into the action and blows up The Moose with the explosive he had attached to the Moose when he had jumped onto it earlier before the Moose (Moore) has a chance to kill Ninja.
They bury Yolandi in a shallow grave. Chappie says he's needs to go back to Tetravaal to kill a man (meaning Moore, whose Moose robot shot Yolandi/Mommy dead). Chappie drives Deon in the van back to the Tetravaal headquarters/lab. Moore is still there. Chappie beats him into a mangled mess, but doesn't kill him. Deon is seconds away from death, but Chappie puts Deon's consciousness into the one orange test robot that's available.
As Transvaal secutiry forces try to get into the room they're in, Deon, now a robot, figures out a way to save Chappie too. He sends Chappies consciousness into the nearest fallen Robocop, out on a street nearby the Tetravaal HQ, from Moore's computer, which still has the guard key inserted into it. So Deon and Chappie are both robots now.
Chappie saved Yolandi's consciousness saved on a USB flash drive from earlier when he was testing out the helmet. Chappie hacks into the Tetravaal robot factory and has it create a new schematic, for a female scout. Presumably much later, after Tetravaal has built and tested the new female Scout, Yolandi's consciousness is transferred into a brand new Fembot. And Deon, Chappie, and Yolandi all lived happily ever after....... as Scout robots.