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The year is 2020 (according to an on screen caption). Teenager Alan Tracy (Brady Corbet), sent off to a distant boarding school, is the youngest of the sons of Jeff Tracy, a retired American astronaut (Bill Paxton). Jeff, a widower, has formed International Rescue, and raised his sons to act as a secret, volunteer organization which uses highly advanced technology to save lives worldwide. Jeff and his older sons (John, Virgil, Scott, and Gordon, who like Alan were named after the Mercury Seven astronauts) are joined in this effort by Lady Penelope and her butler/chauffeur Parker (a man whose "checkered past" comes in handy). Their futuristic hardware is largely developed by a genius scientist known as Brains (Anthony Edwards), who lives at the International Rescue base on Tracy Island, somewhere in the Pacific.

Alan is eager to join his family in their work, but his big brothers still see him as just their little kid brother; not ready for duty. Alan is befriended by Brains' son Fermat (Soren Fulton) and has a budding romance with Tintin (Vanessa Anne Hudgens), adolescent daughter of Tracy Island's caretaker, Kyrano (Bhasker Patel), and the cook, Onaha.

Ben Kingsley portrays the arch-villain known as The Hood, a character introduced in the first episode of the television series, brother of Kyrano. Bitter over having been abandoned and presumed dead by the Thunderbirds in an early rescue attempt, he has come to destroy them and take their machines to use in a daring raid on the Bank of England (renamed Bank of London, for the film) vaults. He launches a missile to wreck Thunderbird 5, the orbiting communications station. The Tracys except, of course, for Alan - launch into space aboard Thunderbird 3 to rescue John Tracy, who is manning the station when it is hit, and The Hood takes over the secret island base.

Using his mental powers to overcome Brains' resistance, The Hood takes control of the Thunderbirds home base, aided by his criminal counterpart Transom (Rose Keegan) and strongman Mullion (Deobia Oparei). He also disables the control systems, stranding the rescuers aboard the disintegrating Thunderbird 5. Alan, Tintin and Fermat, having observed the invasion of the Hood and his minions, then hearing his plans, launch a hasty resistance. Fermat disables heavy-lifter Thunderbird 2 as they retreat from the base, then flee to the mountaintop radio transmitter site. They make contact with Jeff Tracy, who tells them to wait for Lady Penelope to come and take charge. However, the impulsive Alan leads the other two teenagers into ill-planned action, resulting in their capture. Lady Penelope and Parker are likewise captured, and Alan is forced to give Thunderbird 2's missing guidance processor to the Hood. The island's defenders all end up locked in the walk-in freezer while The Hood, Transom and Mullion head off to London.

Escaping the freezer, the first order of business is to rescue Thunderbird 5 and the Tracys. Reporting The Hood's scheme, Alan gets his chance to go to work as he manages to convince Jeff to let him, Fermat and Tintin go after the Hood as his father and brothers would never make it in time. John, Brains and Lady Penelope back Alan up and Jeff reluctantly agrees. Alan, Fermat and Tintin launch for London in Thunderbird 1, chaperoned by Lady Penelope and piloted by Alan and Fermat while Parker heads for the Bank of London to meet up with them in FAB 1.

The Hood and his accomplices, having arrived in London, use International Rescue's drilling machine The Mole to begin tunneling toward the vaults at the Bank, in the process damaging the support pylons for a public-transit monorail, which falls into the River Thames. The pursuing Alan, Tintin and Fermat land next to Thunderbird 2, then begin their rescue of the submerged monorail and its passengers. Alan turns over piloting duties to Fermat, then launches in the Thunderbird 4 rescue submarine. When Alan and Fermat are unable to connect the lifting cable, Tintin dives into the water, swims down to the stricken monorail where she secures the cable, then joins Alan aboard Thunderbird 4. Jeff and his other sons arrive just in time to see the successful rescue, then Jeff, Alan, Tintin and Fermat rush to the bank, where they are joined by Parker.

Lady Penelope has been captured, and Jeff is soon imprisoned with her. Fermat and Parker defeat Mullion by working together, while Tintin evades (then traps) Transom. She arrives on the scene just in time to see The Hood - her uncle - wiping the floor with Alan. She then proves that she has mental powers similar to her uncle's and actually overpowers him in the resulting duel, which results in the evil Hood falling into mortal danger. Alan has to choose between saving the Hood and letting him die, but saves him saying that saving people is "what we do."

The Hood, Mullion and Transom are arrested by the police with the Hood promising to "see you soon, Jeff." With the evil-doers turned over to police custody, the Tracys return home, where the three young heroes are inducted into International Rescue. Moments later a call from the President has the Thunderbirds (minus Jeff who stays behind, but including Alan and presumably Fermat and Tintin) off on another mission.

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