Before an assembly of police brass that includes his boss Captain Braddock, LA chopper pilot Frank Chaney demonstrates the Blue Thunder, an advanced attack helicopter with powerful surveillance equipment and a 20-mm. Gatling cannon capable of shredding anything. The demonstration goes well despite some hot-dogging by Chaney to the displeasure of Braddock. Braddock, Chaney, and his new co-pilot Clinton Wonderlove (nicknamed JAFO for Just Another Foolish Observer) are teamed with a ground support unit of officers Richard Butowski and Lyman Kelsi as the city is attacked ...

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A fighter jet is stolen. The Feds go to the team and ask for their help in locating the jet. When they find it, the agent who joins them, tells them to shoot it down which they were not told they were going to do. The jet escapes. Frank then asks what's going on, the agent in charge doesn't tell them much, only to do what they are told to. Frank gets close to the agent and she wants to tell him but can't. Later she goes to Frank shot and dies before she can say anything.

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The team helps rescue a person who could give testimony that could send a white collar criminal to prison. The man is sentenced to minimum security prison. Some men try to get him from the transport bringing him to prison. But Frank and Blue Thunder stop him and bring him to prison. Frank tells the Captain that he should ask the powers that be to send him to a maximum security prison. But he doesn't think it's necessary. Later one of the inmates at the prison overhears a conversation he has with his lawyer and it's obvious he is planning something. So he tells Frank ...

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Frank is grounded when another helicopter pilot claims that he interfered with him doing his job. The man turns out to be he who was considered for the Blue Thunder project along with Frank, which Frank got. And he ends up replacing Frank on the team and he is so difficult for the guys to work with, that Ski and Bubba walk off. At the same time, they're looking for someone who was kidnapped. Later Jafo and the man are tasked with delivering the ransom. And Frank, who is now in uniform, finds a lead that takes them to an unexpected person.

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Braddock's daughter is kidnapped. Later on instructions of her captor she calls her father who tells him they want Blue Thunder. Frank and the others get a lead on who kidnapped her. They eventually find the man problem is that he is in Mexico so it'll take a lot of work to get them permission to enter the country. The man calls Frank and offers to give the Captain's daughter back if Frank delivers Blue Thunder to him. He gives Frank three hours so while Frank finds a way to get Blue Thunder in the air without the Captain's knowledge, Ski and Bubba go into Mexico and ...

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The team tries to protect a girl who's the grandchild of a recently deceased mobster. It's believed that before the man died he entrusted to her all of his records of his criminal activities. And some of the people he did business with are worried that they could be incriminated. So they've been making attempts on her. Frank tries to convince her to turn them over to them.

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