Within four years from 2008 the economy of the United States has fallen into disaster, Unemployment and crime rises, and private corporations run most prisons across the nation for profit. The movie focuses on the Terminal Island Prison, which broadcast "Death Race" to the world via a popular paysite on internet. Death Race is not only a race to the finish line, but a battle pitting car against car.
The film begins by showing a race near its end between Machine Gun Joe (Tyrese Gibson) and a famous masked driver known as Frankenstein (David Carradine in a cameo appearance), who is accompanied by a female navigator. Frank's defensive systems fail, and Joe destroys Frank's car (his navigator ejects), presumably leaving Frankenstein critically wounded, or dead.
Jensen Ames (Jason Statham) is framed for his wife's murder on the same day that the steel mill he works at closes; the murderer is actually a masked intruder that points a finger-gun at Ames as he leaves. Ames is sent to prison where he is coerced by the sadistic prison warden, Hennessey (Joan Allen) to become the new driver of Frankenstein's Ford Mustang. She tells Ames that she knows of his baby that was left in foster care, and that prisoners are freed upon winning five Death Races, but since he will take on the mask of the legendary Frankenstein, who had 4 wins at the time of his death, he will only need to win one race. The races are broken apart into three stages: Stage 1 and 2 are races in which the driver must survive, and Stage 3 you must win the race in order for it to add to the count towards freedom.
Just before the Stage 1 Race, Ames is introduced to his navigator, Elizabeth Case (Natalie Martinez), who happens to be Frankenstein's previous navigator. During the race, Ames see another driver, Pachenko, make the same hand gesture as the intruder that killed his wife. Three drivers are killed during Stage 1: Siad, Grimm, and Travis Colt. Ames finishes last after taking a hard hit from Machine Gun Joe.
Ames learns he is part of a plot to keep the legend of Frankenstein alive, solely for the personal profit of Hennessey. He confronts Hennessey about the driver, but instead she shows him pictures of his baby living with foster parents, asking him if he thinks he could provide for his baby better than the foster parents. Angered, he takes one of the pictures and leaves. The night before Stage 2 he makes a trip to the garage of Pachenko's team to confront him. He is beaten down by a few members of the team but is helped by a member of his garage allowing Ames to retaliate and nearly kill Pachenko. His revenge is thwarted by the prison guards telling them to save it for the race.
Ames goes into the Stage 2 race and immediately questions Case on her intentions. She tells him she was ordered to sabotage Frankenstein's defense weapons so he would not win his freedom, and thereby earn her own. Ames realizes he is not meant to survive the Death Race at all, but is meant to die so another "Frankenstein" can be brought into the prison to keep viewers paying to see the races. He seeks revenge during Stage 2 by crippling and rolling Pachenko's car allowing him to turn around drive back and to get revenge up close and personal by snapping Pachenko's neck as he crawls away from the car wreck. Five drivers remain until 14K, Carson, and Riggins are killed by 'The Dreadnought', Hennessy's secret weapon, the Dreadnaught, (an 18 wheel tank truck filled with massive machine guns) that had been in production for months. Ames and Machine Gun Joe are able to destroy The Dreadnought and finish Stage 2. Realizing that Ames knows what's going on, Hennessey has Ames' car armed with an explosive before the Stage 3 Race as insurance to make sure he does not cross the finish line alive. However, Ames devises his own scheme from an image shown by one of his crew members of a destroyed billboard in an earlier race, and tells Joe that he and Frankenstein should talk.
The Stage 3 Race begins with only two drivers remaining: "Frankenstein" and Machine Gun Joe. The race begins, and Ames soon takes the lead. However, the odds are against Ames as Hennessey rigs the track to benefit Joe. Throughout the entire lap, Joe keeps hot on Ames' tail, and as they near the beginning of the second lap, Joe preps newly added missiles and fires an RPG in Ames' direction. However, they seem to miss the car and instead hit the billboard at the first turn of the track. It is shown that the image Ames saw was a pathway to the bridge leading off the island to the mainland behind the destroyed billboard.
Ames and Joe escape onto the bridge, pursued by police cruisers and helicopters. As the cruisers close in on the two cars, Ames releases his exposed fuel tank, causing it to explode and stop the pursuing cars. Turning to her back up plan, Hennessey then orders that the explosive under Ames' car be set off, but nothing happens because Coach (Ames' mechanic) had found, removed, and deactivated the bomb prior to the start of the race. Escaping past the bridge, Joe and Ames separate, and Hennessey orders the helicopters to focus on Ames, but he switches seats with Case when she tells him that Hennessey had already signed her release papers for her work, and that she owed one to the old Frankenstein. He jumps from the car leading the helicopters to believe he is still inside. Joe meets up with Ames and they board a train to escape, lamenting on Hennessey's continued existence. Soon, Ames' Mustang is stopped and "Frankenstein" is apprehended.
Later, Hennessey believes she still won after all, as a guard notifies her about presents sent to her for the record number of viewers subscribing to the Death Race. However, the explosive that was put on the Frankenstein car is inside, and Coach blows them up.
Six months later, Ames and Joe are shown working in a junkyard in Mexico, when Case unexpectedly arrives. The two men are happy to see her, and Case meets Ames' baby, Piper. The movie closes with Ames explaining that even though he knows he's far from being the best parent in the world, no one could love his baby more than he could.