In 1947 New York, Chief Jack Thompson and Agent Peggy Carter of the Strategic Scientific Reserve (SSR) apprehend Soviet spy Dottie Underwood. Newly appointed Chief Daniel Sousa of the Los Angeles SSR office meets with Detective Andrew Henry, who has discovered a woman's body in a frozen lake during a heat wave. Sousa, doubting his inexperienced agents, asks Thompson for backup; he sends Carter. An autopsy shows that the body glows in the dark, likely caused by Isodyne Energy's particle accelerator. Carter learns from Isodyne scientist Jason Wilkes that the woman, physicist Jane Scott, had an affair with Isodyne owner and prospective senator Calvin Chadwick. Underwood is taken into FBI custody, with Thompson's mentor Vernon Masters warning him of greater forces than the SSR that may affect his future.

Chadwick meets with the secretive Council of Nine, who shut down his Zero Matter program due to its seeming lack of results, and want him to focus on his senatorial ambitions. Chadwick informs Frost, who is the true brains behind the program, while struggling with her acting due to sexism in Hollywood. Wilkes meets with Carter to help with her investigation, though he is hesitant to turn on Isodyne—the only company willing to hire him as a black man. Wilkes explains that Isodyne had attempted to replicate the success of the Manhattan Project and in doing so had discovered Zero Matter. Scott must have come into physical contact with it, though its effects are not limited to freezing. Carter and Wilkes agree to steal the Zero Matter, but at Isodyne find Council agents destroying the program. Wilkes gets to the Zero Matter, where he is confronted by Frost, who is there to steal it herself.

At Frost's behest, Chadwick frames Wilkes as a Communist spy who had infiltrated Isodyne and destroyed the facility. Thompson comes to Los Angeles to 'clean-up' the situation at the invitation of Masters, sending Carter back to New York when she enlists the help of Howard Stark to investigate the Arena Club—whose membership pin was borne by the Council agents—but is unable to prove that the Council has blackmailed Chadwick's senatorial competitor into dropping out of the race. Carter 'misses' her flight, and after unsuccessfully confronting Frost, is attacked by Council hitman Rufus Hunt, barely fending him off. Investigating a gravitational anomaly around Carter, Stark discovers Wilkes is alive but temporarily invisible and non-corporeal, and goes in search of his mentor for help in restoring Wilkes' body.

In the 1920s in Broxton, Oklahoma, Agnes Cully (Frost) is shown to have a brilliant mind, fixing a broken radio, inventing devices, and applying to a science program at Oklahoma University (unsuccessfully due to her gender). In 1934, Cully travels to Hollywood, where she is approached by a talent agent, promising to make her a star. In 1940 in England, Carter, who is engaged, receives an offer to join the Special Operations Executive due to her work at Bletchley Park as a codebreaker; she eventually accepts the offer and leaves her fiancé after her brother's death in the war. In 1947, Carter and Jarvis kidnap Hunt in an attempt to learn more about the Council. After getting names of members of the Council and locations of transcripts of their meetings, Carter and Sousa prepare the SSR to infiltrate the Arena Club, but are stopped by Masters. They let a bugged Hunt escape, and he attempts to blackmail Chadwick in exchange for protection.

Wilkes becomes drawn to the Zero Matter in a sample of Scott's body. After absorbing that small amount, Wilkes temporarily regains his physical body and discovers the location of Scott's. Carter and Jarvis attempt to steal Scott's body, hoping that the rest of the Zero Matter within it will restore Wilkes permanently, but arrive to see Frost taking the Zero Matter for herself, before convincing Chadwick to help her steal an atomic bomb from the Council so she can replicate the original discovery of Zero Matter. They seek help from Frost's ex-boyfriend Joseph Manfredi, a crime lord, who gives them men for the job in exchange for Chadwick's influence in the media. Carter, Jarvis, Sousa and some SSR allies break into the Roxxon facility holding the bombs and disable them before Frost can reach them. Carter confronts Frost, but she escapes when Carter is impaled on a rebar.

Desperate to stabilize himself before he is completely drawn away, Wilkes designs a containment chamber for himself, but requires more Zero Matter. Carter realizes that Frost is now the only source of Zero Matter, but is still too injured to get it herself. Instead, she breaks Underwood out of prison, sending her to one of Chadwick's campaign events with Jarvis. The event is also cover for a Council meeting, with Chadwick having convinced them to see Frost (they usually never speak with outsiders, let alone women). Masters and Thompson are also at the event; Jarvis distracts Thompson while Underwood collects the Zero Matter from Frost using a device designed by Wilkes. Sousa tells Carter that his fiancée left him due to his supposed feelings for her. Underwood eavesdrops on the Council meeting, watching as Chadwick betrays Frost and has her restrained.

Frost and the Council cover up her murder of Chadwick and the other Council members, and Frost makes Manfredi her second-in-command. With the help of Jarvis's wife Ana, Wilkes uses the Zero Matter and containment chamber to restore his physical form, though he knows he cannot leave the chamber for long. Masters tries to interrogate Underwood, before Frost reassigns him to finding the uranium that Carter and company stole from the Roxxon bombs. Frost interrogates Underwood herself, using her abilities, and learns that Carter wanted the Zero Matter because of Wilkes and his condition. Frost sets a trap, luring Carter and Jarvis away from Wilkes. Masters attempts to get Sousa to cooperate in retrieving the uranium, and when he refuses, has men attack him at home, forcing Sousa to take leave—Masters takes over SSR L.A. Frost and Manfredi kidnap Wilkes, with Frost hoping to help and study him.

Frost tells Wilkes that if he accepts the power of the Zero Matter within him then he will be able to control it. Carter and Sousa meet with Frost, giving her fake uranium in exchange for Wilkes. Frost soon realizes the ruse, and pursues them. Wilkes, learning to control his abilities and change between corporeal and non-corporeal states, turns on Carter, demanding that Sousa reveal the location of the real uranium. Sousa directs him to a vault at the SSR. Ana survives surgery, but loses the ability to have children. Thompson overhears Frost telling Masters to retrieve the uranium, but is incapacitated by Masters. Carter and Sousa join Thompson, and, along with Jarvis and a new gamma cannon courtesy of Stark, travel to the Isodyne atomic testing area. Wilkes is sucked into a rift created by the now armed atomic bomb, but the cannon closes the rift and returns Wilkes, now full of Zero Matter.

Carter and Jarvis escape capture while Thompson and Sousa return to the SSR. Manfredi sets up a new lab for Frost in an abandoned facility, where she begins trying to take all of Wilkes' Zero Matter for herself. Thompson convinces Masters to use the gamma cannon against Frost, then visits Frost, warning her of Masters' treachery and offering to turn on him in exchange for a seat on the Council. Thompson then turns on Carter and Sousa, delaying them, as he actually intends to remote detonate the cannon to kill Frost, Masters, and Wilkes. Thompson turns Masters over to Frost, but the SSR manage to jam his detonator signal before he can detonate the cannon. Carter tries to get Wilkes out of the building, but he refuses to leave knowing what he has become. Thompson holds the others at gunpoint until his signal is un-jammed, though Carter is still unwilling for Wilkes to die.

Frost absorbs the Zero Matter released from Wilkes, who is rescued by Carter, as Stark returns and aids in their escape. Thompson finds in Masters' possession a supposedly incriminating file on Carter and a secret Council key. Manfredi becomes concerned with Frost's behavior, and her new obsession with opening another rift, this time with a machine of her own design. He meets with Stark—an old friend of his—and the others, and agrees to distract Frost while Carter and Sousa photograph the blueprints for Frost's machine, which Stark and Wilkes build themselves. They open a new rift, and Frost is drawn to it. They use the gamma cannon to expel the Zero Matter from her, into the other dimension; Frost is left insane from her time controlled by the Zero Matter, and is placed in a mental asylum.