In 1967, British spy Austin Powers thwarts an assassination attempt by his nemesis Dr. Evil in a London nightclub. Dr. Evil escapes in a space rocket and cryogenically freezes himself. Powers volunteers to be placed into cryostasis in case Dr. Evil returns in the future.
Thirty years later, in 1997, Dr. Evil returns to discover his henchman Number 2 has developed Virtucon, the legitimate front of Evil's empire, into a multibillion-dollar enterprise. Uninterested by genuine business, Dr. Evil conspires to steal nuclear weapons and hold the world hostage for $1 million. He increases his demand to $100 billion when he learns that the value of the dollar has fallen due to inflation. Dr. Evil also learns that, during his absence, his associates have artificially created his son, Scott Evil, using his frozen semen. Now a Generation X teenager, Scott is resentful of his father’s absence and resists Dr. Evil's attempts to get closer to him.