While working late, Togusa gets a call from one of his colleagues from his days on the police force. It seems that he's uncovered something strange happening with the investigators in the Laughing Man Unit, a special task force formed to catch the infamous cyber criminal known only as the Laughing Man. But before he can meet with Togusa, he's killed in a car accident. Now, Togusa only has an envelope full of seemingly random photos to go on--can he put the pieces of the puzzle together?
The Laughing Man, having returned after a six-year absence, threatens to assassinate the Superintendent-General of the police. Everyone is in an uproar over his return. Aramaki, however, thinks it's a cover-up. He briefs Section 9 on the prime suspect, Nanao=A, an incredibly gifted programmer who developed the micro-machines that are currently the foundation of Serano Industries. Still, it's just too perfect. The team splits up and investigates.
As Togusa and Bato track down Nanao, Motoko and Paz are attempting to protect the Superintendent-General at a press conference about the police misuse of interceptors. When the virus does hit, Motoko and Paz have to act fast to save the intended victim. Meanwhile, the road to Nanao=A hits a dead end.
Section 9 is on the trail of Marcelo Jarti, a South American revolutionary hero who has arrived in Japan. However, Jarti is a hard man to catch because he employs look-alikes to deceive people. Nevertheless, Section 9 is convinced that the one they're tracking is the real thing, and after a rather out-of-control gunbattle in an upscale hotel, they track him to an old warehouse. When they split up, Togusa, Batou, and Motoko each encounter Jarti--at the same time!
Motoko's friend Courtin asks her to come to the hospital where she works. It seems a little girl just received a heart transplant, but the donor's family doesn't remember ever agreeing to donate the heart. Seeing the little girl reminds Motoko of her own past. When she mentions this story to Aramaki, he tells them to determine if this is tied to a ring of black-market organ smugglers supposedly run by the mafia.
After being shot, Togusa's in the hospital and about to go into surgery, but he is desperate to pass on what he's learned to the rest of Section 9. As Togusa fights for his life, the rest of Section 9 takes over the case, but others within the government have learned of the investigation and are not happy. A special forces unit is dispatched to intercept them with a state-of-the-art Armed Suit.
The Laughing Man returns! And, just as he did six years ago, he kidnaps the president of Serano Genomics without being detected. Section 9 arrives at Serano's house too late, and sets out to find him. The Laughing Man and Mr. Serano discuss what happened six years ago, and why Mr. Serano hasn't fulfilled his promise. This time, however, things are going to be different, with or without Serano's help.