This film starts directly after the second one. Neo is stuck in "limbo" between the matrix and the real world. The only one who can get him out is the Meriovigian. Morpheus and Trinity visit The Oracle, who looks entirely different. She had to change her body after being punished by the Meriovigian for helping Neo. She tells them that the Meriovigian can help them so Morpheus, Trinity and Seraph go to the club where Persephone and her husband are. After some dealing, they are delivered to Neo.
While the crew of the Neb, Hammer, and the Logos talk strategy, Bane wakes up. He remembers nothing and talks in nonsense. Neo announces that he must take a ship to go to the machine world. Niobe lets Neo take the Logos. The doctor is fixing Bane when he kills her and takes refuge on the Logos. Trinity decides to go with Neo, telling him that she would do anything for him. As Neo and Trinity prepare to take off, the ship wont start. Trinity goes to the engine room to fix it, but is attacked by Bane aka Agent Smith. Neo comes to the rescue, but is electrocuted by Bane in the eyes, therefore blinding him. Neo now sees mostly everything in an orange light.
In the Matrix, Agent Smith pays a visit to the Oracle. He calls her "mom", therefore telling us that he is the product of a program made from the Oracle He then infects her, creating a Super Agent Smith. Meanwhile in Zion, the sentinels break through the walls and begin drilling. Morpheus, Link, and the crew from the Hammer and Logos take the Hammer to foil the sentinels. The plan fails and they decided to go through Gate 3 into Zion to use their EMP.
Captain Mahoney who was in charge of opening Gate 3 is killed, but The Kid saves the day, with the help of Link's wife, Zee. The Hammer uses the EMP, but Commander Lock is furious, due to the fact that the EMP blew out nearly all of Zion's resources. As Zion prepares for the final showdown, Trinity and Neo reach the machine city. They are attacked by senitels, and Neo cannot stop them all. They take the Logos all the way up through the sky, seeing blue sky for the first time.
However the ship crashes, and Trinity dies after being impaled by poles. Neo makes his way to the Source and makes a deal: the death of Smith for the end of the war. Neo defeats Smith and the war ends. Neois taken away by machines, perhaps for his coding to be reinserted into the matrix? We never truly find out if he is dead or not. The Architect tells the Oracle that he will allowed more minds to be freed, and he doubts the peace will last, because the machines were never truly defeated. The oracle says she obtained her knowledge because she believed in everyone. The movie ends with a shot of the sun in the sky in the Matrix.