The movie opens in a quiet suburban neighborhood in the 1980's. Xavier and Magneto are arriving at the Grey home to both personally evaluate a potential new student for the school Xavier has established for mutants. Mr. and Mrs. Grey call their young daughter, Jean, down to speak with Magneto and Xavier. As Jean sits, Xavier senses immediately that she's telepathically reading his and Magneto's thoughts, and gently admonishes her, saying that he and Magneto are 'like her.'
In a surprisingly adult-like voice for a young adolescent, Jean says she doubts either of them are like her. A second later, all the cars outside begin to levitate off the ground, much to the amazement of Xavier and Magneto. A man watering his garden gawks as the water coming out of his garden hose begins to flow straight upward. Xavier quietly asks Jean if she wishes to learn to control her immense power, or let it control her.
Cut to ten years later, in a high-rise luxury building. A boy scrapes at his back, crying as he does so. The boy's father, Warren Worthington II knocks on the bathroom door, concerned. He asks his son to open the door. Warren III cries out suddenly, in fright, for his father to give him one second, and starts hurriedly trying to hide what he's been doing.
Several bloody rags are seen besde the sink, and Worthington hears the sound of clanking as his son rushes to hide his razor and several other sharp metal objects. Knowing something is seriously amiss, Worthington kicks the door in and sees what his son was trying to hide. Several bloody feathers are on the bathroom floor, having sprouted from Warren III's back. Warren III is a mutant.
In the present day, the X-Men are in Xavier's training simulation chamber playing out a defense against a futuristic robotic attack. Colossus turns himself and Rogue into organic steel to protect them both from flying debris. Iceman stops an incoming guided missile by freezing it, knocking out its heat sensors. Just then, another one comes flying in.
Shadowcat grabs him and puts both he and herself out of phase, so the missile passes harmlessly through them. Storm and Wolverine note that the massive robotic entity they are training against, is routing all of the X-Men. Wolverine admonishes Storm that the younger, less experienced of the X-Men aren't practiced and strong enough yet. Over Storm's protests that the X-Men need to work as a team, Wolverine has Colossus hurl him straight at the robot.
Wolverine's insta-regeneration powers and adamantine claws rip off the robot's massive head, destroying it. Storm and Wolverine argue as the X-Men leave the simulation room. The training exercise was meant to help the team learn to operate together and defend, while Wolverine believes in defending through taking out whatever is attacking. Because of this, he's just a substitute teacher for Xavier's school.
Cyclops sits alone in his room, haunted by Jean Grey's death. Meanwhile, Rogue has a brief spat with Iceman. She loves him, but their relationship torments her because he can't touch her bare skin safely because of her life-leeching powers. In another part of the school Wolverine finds Cyclops heading out of the school and there is a brief, but emotional, confrontation over both of them having loved Jean and are mourning her death.
Beast, Secretary of Mutant Affairs in the presidential cabinet, is reading a scientific magazine with articles on mutation and the gene that helps bring it about... 'sitting' while hanging upside down from the ceiling. His secretary announces the start of a Presidential staff meeting. As Beast arrives at the meeting, Homeland Security secretary Trask announces that they lost a track on Magneto, but have successfully captured Mystique. A surveillance camera shows her being interrogated by FBI.
Mystique refuses to answer to her human name, so the interrogator tries to accommodate her. She frustrates and vexes him by shapeshifting into him in order to mock him. When the interrogator loses his patience and demands she tell him where Magneto is, Mystique suddenly headbutts him and shows how, even with her wrists in heavy shackles, she is still a dangerous enemy. It takes several FBI guards to finally overpower her.
Beast is dubious about the Presidential cabinet's ability to hold Mystique, and knows that holding her will make Magneto angry, though it gives the cabinet some diplomatic leverage. But Beast realizes that diplomacy with Magneto is not why the President called for his attendance. The President shows Beast a folder with documents that Mystique was trying to steal from the FDA when she was captured.
Beast opens the file to find a series of biochemical analyses from Worthington Labs, along with a profile on a young boy named Jimmy, also known as Leech. The analyses show that Jimmy is capable of suppressing the mutant X-gene. The President tells a horrified Beast that the research is believed to be viable, and the potential effect it will have on the mutant community is exactly why the cabinet desperately needs Beast's considerable diplomatic skills, now more than ever.
Xavier is giving a lecture to mutant students in the school, discussing Mutant ethics. An example he gives is a brain-dead patient of Dr. Moira MacTaggart. The psychic ability to transfer a human consciousness, even that of a family man with four children, and who is dying of cancer, into the body of the brain-dead man, raises serious ethical issues. Xavier suddenly pauses, staring vacantly, Outside, the skies turn darker as heavy clouds begin to gather and converge.
Xavier tells his class that they'll break early and continue tomorrow. Xavier finds Storm on the terrace; her mind heavy with troubles which was causing the sudden weather shift. Magneto is a fugitive, Beast is on the Presidential cabinet and the US President has shown a lot of goodwill toward mutants-- so, as Storm believes, the Academy shouldn't need to be in hiding.
Xavier says it's not hiding as much as staying wary of the Academy's remaining enemies and protecting the students. When Xavier mentions he sees Storm as becoming the new Headmistress of the academy one day, Storm freezes. She thought that Cyclops was the natural successor. Xavier says Cyclops has never been the same since Jean's death.
Storm knows there's something Xavier is hiding, but he continues on toward his office without acknowledging. Xavier and Storm find Beast in Xavier's office, and Wolverine joins them a few seconds later. The reason for Beast's visit is to report what he was shown during the cabinet meeting: a major pharmaceutical company has developed a way to suppress the mutant X-gene... and its effects are reportedly permanent.
The company is calling the research a cure for mutancy, turning any mutant back into a regular human. The impact of the discovery hits right there, as Storm reacts in outrage to the news. Storm sees the discovery as equivalent to humans calling mutancy a disease in need of treatment. Xavier quietly cuts Storm off, saying the pharmaceutical company is making a public announcement as they speak.
On Alcatraz Island, Warren Worthington II is making a public announcement about the cure. His speech carefully declares mutants to be people, just like humans, before breaking out the 'scare words' like mutancy being a disease and a corruption of healthy cellular activity. He says that any mutant who wishes to undergo the cure is welcome. As several Academy students watch the announcement on TV, Rogue appears to listen with rapt interest.
She goes to Xavier's office, where Xavier is still speaking to Storm, Beast and Wolverine about the ethical and moral dilemma brought about by the discovery. Rogue seems very eager to hear if a mutant cure is real. Storm angrily tells her that there is nothing about them that needs curing; there is nothing wrong with any of the mutants at the academy.
A group of mutants call for a meeting at a local church to discuss the issue. The leader of the meeting is looking to pursue peaceful negotiation with the government in order to protest the cure. But also attending the meeting are Magneto and Pyro, looking to recruit angry mutants for the Brotherhood. Magneto warns the mutants at the meeting that while they try to pursue negotation and peaceful methods, humans.
Especially the humans in government, will start to force the cure on them a few at a time in a divide-and-conquer strategy. Inciting some of the mutants with these warnings, Magneto gains four new members for his Brotherhood. Kid Omega, who can cause spike-like spines to erupt from all over his body; Psylocke, who can teleport through shadows; Arclight, who can loose concussive air pressure shockwaves.
And the Omegas' leader, Callisto, who can move with superhuman speed, and also sense the nearby presence, and strength, of other mutants. She knows that Magneto and Pyro are the only mutants in the building higher than class III in the degree of their powers. Magneto is particularly intrigued by Callisto's power to sense other mutant presences, and asks if she can locate a particular one for him.
A heavily armed police convoy is escorting a fortified, armored police semi-truck serving as a mobile prison, which is carrying a captive Mystique, who is confined behind a heavy barred gate, her wrists shackled to the trailer's ceiling, her arms stretched above her. Mystique taunts the guards watching over her by mimicking first the President, and then a very young girl. One guard threatens to spray her with pepper spray, and she tells him that she's going to personally kill him.
Beast arrives at Alcatraz Island to tour Worthington Labs and meet with Leech, the young boy whose DNA is the source of the cure. He is greeted by the company's chief researcher, Dr. Rao, who will be showing him around. Beast is there to see that Worthington Labs' treatment of the young boy meets with the standards set by the Department of Mutant Affairs.
Dr. Rao brings him to the room where Leech stays in order for him to meet the boy, learn the range of his mutant powers, and see for himself that the boy is being treated very well and kept fully comfortable. As Beast walks toward Leech to introduce himself and shakes hands, he pauses as he sees his outstretched hand suddenly lose its dark blue coloring.
The coarse hair around the back of his hand suddenly recede; making his hand look human. Mere proximity to Leech causes mutant powers to cease functioning as long as the mutants in question are within a certain distance of his body. Beast's hand returns to 'normal' (for him) once he turns away.
Cyclops rides down the road on his motorcycle, heading toward the Alkali Lake reservoir where Jean Grey died. As he walks onto a small natural rock jetty overlooking the lake, he hears the whispered sound of Jean's voice calling his name. Tormented by the whispering voice, he yanks off his red visor shades and a bright beam of light shoots from his eyes, strafing along the lake's surface.
When he regains control of himself and replaces the visor, he sees that the lake is churning and a large whirlpool has formed in its center. From the whirlpool emerges a blast of water and air pressure that knocks Cyclops on his back. Regaining his bearings, he's stunned to find Jean standing alive and well in front of him. Jean asks Cyclops to remove his visor so she can see his eyes.
Which is a dangerous thing to ask as he can't control his powers without the visor. Jean promises him she can control it. She gently removes his visor, and the bright red flash from his eyes slowly fades out to reveal tha natural color of his eyes. Cyclops and Jean begin to kiss. As Jean starts kissing him more passionately, Cyclops' face is shown starting to distort.
At the mutant Academy, everyone hears the telepathic voice of Xavier calling out Cyclops' true name. Storm and Wolverine rush to Xavier's office, where he tells them to hurry to the lake. The two of them arrive at the lake to find cloud cover hanging low over the surrounding hills and a thick fog obscuring vision. Storm clears the fog away.
She and Wolverine find that small rocks, leaves, and even dew on the leaves, levitating in the air. Storm and Wolverine split up to look around, and Wolverine turns to see one of the objects floating in the air in front of him is Cyclops' visor. Storm yells out to him suddenly, and he finds Storm kneeling over Jean, who lies unconscious but alive.
Jean is brought back to Xavier's labs in the Academy where he is running an MRI on her brain. Xavier's only theory as to how she survived the incident at the lake that should have killed her, was that her powers wrapped her in a cocoon of telekinetic energy. Jean is the only mutant Xavier has ever met whose power is ranked at Class Five, meaning there is no known limits to her powers.
Making her even that much more dangerous is that her mutation is in the unconscious part of her mind, which even psychically enhanced mutants have very limited control over. Deeply concerned about Jean's ability to control her powers, Xavier placed a series of psychic barriers around her mind when she first came to the Academy as a teenager, isolating her powers from her consciousness, but this had unforeseen effects.
It caused Jean to develop a disassociative personality disorder; causing her subconscious to manifest an entity calling itself the Phoenix. Jean was the disciplined thinking mind, while the Phoenix was pure instinct and emotion, the essence of every feeling Jean experienced, including desire, joy... and rage. Xavier tells Wolverine that he's unsure whether the Jean that lay before them is truly the Jean they know.
Or the Phoenix struggling furiously to break free and take full control. Xavier is trying to restore the psychic barriers and cage the beast again. Wolverine rebels, warning Xavier that a caged beast often becomes angry at its confinement, and protesting that Xavier is forcing his will on another mutant, which is supposed to stand against everything the X-Men believe in and have been taught by Xavier himself.
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