Approximately twenty years after Gordon Freeman and other scientists accidentally opened a portal to the border dimension Xen and allowed hostile aliens to invade the Black Mesa Research Facility, Freeman is awoken from his stasis by the mysterious G-Man. The events that occurred at Black Mesa attracted the attention of the Combine, an immensely powerful multi-dimensional empire which conquered Earth in seven hours. The Combine have implemented a brutal police state by biologically assimilating humans and other species. The G-Man inserts Gordon into a train arriving at City 17 (located in eastern Europe), the site of the Combine Citadel, where Dr. Wallace Breen, the former Black Mesa administrator who negotiated Earth's surrender, governs as the Combine's puppet ruler.

After eluding the Combine forces, Gordon reunites with resistance member Barney Calhoun, a former Black Mesa security guard working undercover as a Civil Protection officer, who tells him to head to the makeshift laboratory of Dr. Kleiner, an eccentric Black Mesa scientist and old friend of Gordon. Making his way through the backalleys and dilapidated apartments of the city, he gets caught in the middle of a routine inspection raid by Civil Protection, who give chase after Gordon narrowly escapes with the help of a few citizens. Gordon is eventually ambushed after escaping across the rooftops, only to be saved by Alyx Vance, the daughter of Dr. Eli Vance, former Black Mesa scientist and leader of the resistance. Finally reaching the laboratory, Gordon receives his HEV suit and prepares to teleport to the resistance base, Black Mesa East, alongside Alyx. Alyx is successfully teleported and reunited with her father. Gordon prepares himself to be teleported as well but the system fails when Kleiner's pet Headcrab Lamarr interferes. Gordon is teleported to multiple locations both outside and inside City 17, including the Citadel, where Wallace Breen recognises Freeman and places the Combine on high alert. After the teleport is disabled, Gordon is forced to make his way to Black Mesa East on foot through the city's canal system. He obtains an airboat from a group of resistance members and traverses through sewers and rivers, disabling Combine controlled areas on the way.

After a brief confrontation with a Combine Hunter-Chopper, Gordon finally arrives at Black Mesa East, where he is reintroduced to Eli and meets another resistance scientist, Dr. Judith Mossman. Alyx introduces Gordon to her pet robot, Dog, and gives him the gravity gun (Also known as the Zero-Point Energy Field Manipulator), an instrument that can manipulate large objects. When the base is suddenly attacked by Combine forces, Eli and Mossman are captured and taken to the Combine detention facility Nova Prospekt. Separated from Alyx, Gordon detours through the zombie-infested town of Ravenholm, aided by its last survivor, Father Grigori. Escaping the town, Gordon discovers a resistance outpost where he contacts Alyx, who informs him of Eli and Mossman's capture. He uses a customized dune buggy to travel a crumbling coastal road to Nova Prospekt, fighting off alien antlions, and helping the resistance fend off Combine raids.

Gordon breaks into Nova Prospekt and reunites with Alyx. They locate Eli, but discover that Mossman is a Combine informant. Before they can stop her, Mossman teleports herself and Eli back to City 17's Citadel. The Combine teleporter explodes moments after Gordon and Alyx use it to escape Nova Prospekt.

Returning to Kleiner's lab, Gordon and Alyx learn that the teleporter malfunctioned and that a week has passed. In their absence, the resistance has mobilized against the Combine. With the aid of Dog and Barney, Gordon fights his way inside the Citadel. A security system inadvertently supercharges Gordon's gravity gun, allowing him to fight his way up the Citadel.

Gordon is captured in a Combine transport pod and taken to Breen's office, where he and Mossman are waiting with Eli and Alyx in captivity. Breen explains his plans to further conquer humanity with the Combine, contrary to what he told Mossman. Angry, Mossman frees Gordon, Alyx, and Eli before Breen can teleport them off-world. Breen tries to escape through a teleporter, but Gordon destroys its reactor with energy orbs launched from a gravity gun, killing Breen. Just as the reactor explodes, the G-Man reappears and freezes time. He praises Gordon's work and mentions offers for Gordon's "services", before placing him back into stasis.