In 2012, the United States economy collapses and sends unemployment and crime rates through the roof. The imprisoned population is so vast that private companies are hired to contain them. In Terminal Island Prison, "Death Race", a gladiator-like fight-to-the-end competition is held to raise funds.

The film begins six months before by showing a race near its end. Machine Gun Joe (Tyrese Gibson) and a famous masked driver known as Frankenstein (original Death Race 2000 star David Carradine) engage in a bloody battle in which Frankenstein wins, but at the cost of heavy injuries and eventually death. Six months later, Jensen Ames (Jason Statham), an ex-racecar driver, is framed for his wife's murder. Ames is sent to Terminal Island Prison where he immediately becomes enemies with an Aryan brotherhood gang, led by Pachenko (Max Ryan). He is taken to Hennessey (Joan Allen) who tells him that the gang will kill him without her help. Thus he is coerced by the warden to become the new driver of late Frankenstein's car. The warden tells Ames that she knows about his baby daughter left in foster care. She also states that prisoners are freed upon winning five Death Races, but since the legendary Frankenstein had 4 wins at the time of his death, he would only require a single win. He agrees to race.

"Death Race" consists of three different stages. The first stage is an elimination round with the sole goal being to come out alive and to eliminate as much of the competition as possible. In each race, there are three activation switches, Swords, Shields, and Death Heads. These power-ups are in the form of lights on the ground that are activated when passed over by a car. Swords activate offensive weapons, shields activate defensive weapons, and death heads activate a spiked wall that impales the car and the racers inside. The wall then goes back into the ground, killing anyone inside. In the first race, Grimm is killed by Joe by being struck as a "pedestrian", resulting in a gruesome "head-exploding" shot. Jensen survives the race, killing one racer but coming in last place after Machine Gun Joe rammed into his car. It is then revealed that Hennessey had Pachenko murder Jensen's wife and frame him for it, in order to bring him to Terminal Island and make him the new Frankenstein. During the second race, the goal is again to survive. Hennessey plots against Frankenstein, hoping to use his popularity to keep ratings up. The race starts and much to the dismay of the racers, a gigantic 18 wheel tanker armed with a tank turret, called the Dreadnought, is released. After killing multiple racers, the truck is destroyed when Joe and Ames team up to activate a Death Head that destroys the Dreadnought.

In the third stage, Joe and Ames must race one final time to the winner. Prior to the race Hennessey has a bomb planted under Frankenstein's car, and then manipulates the race to favor Joe. However, her plans are ruined when Joe and Ames escape. Hennessey sends all her police force in pursuit and succeeds in capturing Frankenstein's car. However, Ames had escaped from his car leaving his navigator, Case, dressed up in his costume, however Case has already received her walking papers. Joe and Ames hitch a ride and escape to Miami. Meanwhile, using the bomb from Frankenstein's car, Coach kills both Hennessey and Ulrich, then turns to the camera and breaks the fourth wall, saying, "I love this game". Six months later, Ames has his daughter back and Joe is working on living a clean life free of crime. As the two work on a car in their new home, a car pulls up and Case steps out to join the two..