Leaving off where Last Son of Krypton did, Metropolis has recovered from the Brainiac invasion and everyone loves Superman more than ever but still see him as an alien which makes him feel..well...alienated. Lex is still bitter that Superman made him look bad in front of everyone and that Brainiac tricked him so he is eager to prove he is the good guy. Also, he is distrustful of Superman because he thinks Superman is tricking everyone like Brainiac did.
Clark still regularly visits his Fortress of Solitude as he seeks advice and wisdom from Jor-El. He asks whether or not he can really be accepted by humanity and live a normal life due to his alien heritage. Eventually, Jor-El mentions schematics for a machine to open the Phantom Zone in case Brainiac is still or another, more dangerous threat comes to Earth. Superman hands these schematics over to Prof. Hamilton who currently works for LutherCorp so he can construct it. Hamilton thinks it may be possible due to access to Brainiac's technology that they managed to get while cleaning up Metropolis after his ship exploded.
Lex comes to oversee the construction of the as he wishes to keep a Phanton Zone machine so he can be the hero that puts away any alien threat to Earth (possibly even Superman). The first test of the Phantom Zone machine goes awry and creates a big explosion. John Corben, Lex's ex-military head of security, throws himself in front of Lex to shield him from the blast and is near death but thanks to Brainiac tech, they manage to save him and make him 90% machine. His skeleton is made of an alien metal called Metallo and is theoretically just as strong as Superman and he also has a Kryptonite core. Lex sees this as his way of keeping Superman in check.
Corben is happy at first but realizes that his has no sense of touch and cannot feel anything when he kisses his fiance. She finds it difficult to overcome his condition and he feels like he is no longer even human. He pleads his case to Lex to work on a way to make him human again. Lex has Prof. Hamilton look into cloning technology to create Corben a new body. Meanwhile, Corben becomes frustrated with his condition and goes on a rampage. Superman tries to stop him but is unable to on their first encounter due to Corben's Kryptonite core. Lex is amazed at Metallo's power and notices that he made Superman bleed. Lex takes a sample of Superman's blood and tries to clone Corben a superman body. Corben, however wants a normal body and attacks Lex and damages some of his equipment. Superman has recovered and is ready for a rematch. An epic battle ensues and Superman uses every ounce of strength to get close to Metallo and rips out the kryptonite core and throws it out of range. This leaves Metallo to be a living statue.
Superman is unaware of Lex's clone of him and Lex continues with the project. Prof. Hamilton informs Lex that the clone is merely a shell and needs a mind to inhabit it and that it is imperfect due to Metallo damaging the equipment. Lex says they can always clone another one but that they need to test it out. Desperate for a mind, Lex suggests they use one from the Phantom Zone (some of the criminals in the Phantom Zone were separated from their bodies as a safety precaution with their bodies imprisoned on Krypton). Lex shrugs off the danger of using a criminal mind seeing as how they a have kryptonite which they can use to stop the clone at any time. The release a mind from the perfected Phantom Zone machine and it inhabits the clone. When it gets up and goes crazy, they try using Kryptonite but seeing as how the clone is imperfect, it has the opposite effect. Bizarro is simple minded and is afraid to go back to the Phantom Zone so he tries to prove he's changed by being a crime fighter. Because of his simple-mindedness, he over does it and causes even more problems which causes him to get into a confrontation with Superman. Superman feels sorry for Bizarro when he realizes how sorry and afraid Bizarro is and how he just wants to find some place to belong. However, he is too dangerous to keep on Earth. Prof. Hamilton gives Superman the Phantom Zone Projector and he reluctantly uses it on Bizarro.
Superman takes the Phantom Zone Projector back to the Fortress of Solitude where Jor-El helps put Bizarro on a deserted planet where he can do no harm and live in peace. Prof. Hamilton decides to quit his job at LutherCorp. and takes a job at S.T.A.R. labs. Superman realizes how vengeful Lex is and keeps his guard up around him. Clark and Lois finally agree to go out on a date and he begins to think he belongs on Earth. The movie ends with Prof. Hamilton wondering whether or not something else made it out of the Phantom Zone when they released Bizarro.