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Los Angeles SWAT members Jack Traven (Keanu Reeves) and Harry Temple (Jeff Daniels) are among the many officers who respond to a call about a number of bombs planted in one of the express elevators located in a skyscraper. With the cables of the elevator blown, the unknown bomber (Dennis Hopper) gives one hour for the police to give him $3,700,000.00 before he takes out the emergency brakes. Though he detonates the bomb attached to the emergency brakes with three minutes left, Jack and Harry are able to successfully rescue all thirteen office workers before the elevator falls.

After finding the bomber in a freight elevator, Jack and Harry attempt to stop his escape. However, he takes Harry hostage. Jack shoots Harry in the leg, forcing the bomber to retreat without him; the bomber then sets off an explosion, which knocks Jack unconscious and appears to kill the bomber.

Later, Jack and Harry are given a heroes' ceremony, and Harry is promoted to Detective and given a desk job due to his injury.

The next day, Jack witnesses a commuter bus explode, killing the driver. Right after the explosion, the bomber contacts him on a nearby payphone and, making another ransom demand, reveals that he has planted a bomb on another bus. The bomb will arm itself if the bus exceeds 50 miles per hour, and then detonate if the bus falls below that speed. In addition, the bomber will also detonate the bomb manually if the money is not delivered on time, or if anyone attempts to get off the bus. Since he is told that the bus's radio is nonfunctional, which makes alerting the city's transit authority a waste of time, Jack races to catch the bus on the busy freeways, but arrives too late to stop the bomb from arming. He daringly boards the bus and explains the situation to the driver Sam (Hawthorne James), but a paranoid passenger, believing Jack is there to arrest him, brandishes a gun and fires, wounding Sam. Annie Porter (Sandra Bullock) takes the wheel as Sam is cared for, and with the help of some passengers Jack subdues the gunman and explains the situation to the passengers. Jack is able to see and describe the bomb -- which includes a cheap-looking gold watch -- to Harry, who recognizes the watch as a common retirement gift for police officers. Unfortunately, before an attempt to disarm it can be made, the bus runs into numerous traffic obstacles, forcing Annie to desperately maneuver the bus through the city to keep it above 50 miles per hour at all costs.

In the office, Harry is stumped by the clues: Unlike conventional criminal bombers (who usually tend to stick to using a single type of explosive), the assailant is clearly flexible with his methods and an expert with explosives, yet is incongruously using a poor quality timer.

Meanwhile, Jack's superior, Lieutenant Matt McMahon (Joe Morton), arranges an escort for the bus while he guides Jack and Annie to the currently unfinished 105 Freeway from a following helicopter, a challenge that proves extremely dangerous in itself. Once there, Jack arranges a deal with the bomber to off-load Sam onto a police flatbed truck pacing the bus so his wounds can be tended to, upsetting the middle-aged female passenger who was tending to him. Sam is successfully removed, but the female passenger, fearful, attempts to exit the bus and the bomber detonates a small charge under the bus stairs, sending the passenger underneath, where she is crushed beneath the wheels.

Sometime after this, Jack is notified that the freeway contains a large uncompleted overpass, but he and Annie work together to successfully jump it. From there, they drive on towards Los Angeles International Airport, where they will be able to circle indefinitely on the empty runway without oversight from news helicopters, due to its restricted airspace. Jack convinces the bomber to temporarily let him off the bus, and attempts to use a sled towed by a police vehicle ahead of it to disarm the bomb. Unfortunately, debris on the tarmac makes it impossible and Jack is forced to use a service panel to get back into the bus safely, rupturing the gas tank while doing so.

Meanwhile, the bomber is revealed to be a former Atlanta PD Bomb Squad member, Howard Payne, who retired after losing a thumb as the result of a small charge. Payne's local home is identified, and Harry and other SWAT members raid it. However, Payne is not at home, and it has been armed with a bomb which detonates, killing Harry and his team. Jack becomes violently angry after learning of this from Payne, but Annie calms him down. After remembering that Payne referred to Annie as a "Wildcat" during a previous conversation with him, which he remembers after noticing Annie is wearing the colors of the University of Arizona, he discovers that Payne is monitoring the bus via an on-board camera. The police use the news crew's equipment to create a looped signal to override the one sent by the camera to Payne, so they can surreptitiously remove the passengers from the bus. Jack and Annie escape on a floor panel after sending the unmanned bus on its own, where it crashes into a taxiing cargo plane and explodes. Though Jack has started to fall in love with Annie, she warns him that "relationships started under intense circumstances tend not to work out."

Jack, Annie, and the police regroup downtown to the ransom drop-off point, hoping to catch Payne. However, Payne is several steps ahead of them. Enraged by their deception and posing as a police officer, Payne abducts Annie and straps her into a vest covered with explosives set to go off if he lets go of the pressure trigger he is holding. Jack follows them into the subway system. Payne hijacks a subway train and speeds off, cuffing Annie to the car's frame. However, Jack catches up with the train and is able to board it.

Shortly after the train leaves, Payne shoots its operator to death when the operator attempts to respond to repeated requests to return to the station. Jack then reveals himself and Payne finally gets his money, only to set off dyepack paint bombs that were concealed in the money bag, ruining it. Enraged, he goes up to the roof. A fight between Jack and Payne ensues on the roof of the speeding subway train, with Jack eventually besting Payne by decapitating him with one of the ceiling signal lights.

After disarming Annie's bomb, Jack attempts to stop the train. However, due to the train's control panel being heavily damaged by bullets from Payne's gun, he is unable to. Instead, Jack speeds up the train, hoping it will derail on a curved part of track instead of crashing into a dead end. Jack's plan works as the subway car crashes through a section under construction, and lands on Hollywood Boulevard. Scared but alive, Jack and Annie kiss as bystanders watch, affirming their newfound relationship.