Trama

The opening crawl reveals that the Trade Federation, led by its viceroy, Nute Gunray, has blockaded the planet of Naboo in hope of resolving a galactic trade dispute. Chancellor Valorum (Terence Stamp) of the Galactic Republic, sends Jedi Knights Qui-Gon Jinn (Liam Neeson) and his apprentice Obi-Wan Kenobi (Ewan McGregor) on a secret mission to meet with the Trade Federation to settle the crisis. Unknown to them, the Trade Federation is in league with the mysterious Sith Lord Darth Sidious, who orders them to invade Naboo with their immense droid army and also to kill the two Jedi. Following a failed attempt to force their way into Gunray's command center, Qui-Gon and Obi-Wan escape and flee to the surface of Naboo, where they meet local Gungan outcast Jar Jar Binks (Ahmed Best). As Jar Jar brings them to an underwater Gungan settlement, the Trade Federation captures Naboo's leader, Queen Amidala (Natalie Portman). Through a Jedi mind trick, Qui-Gon secures a submarine, which he, Obi-Wan, and Jar Jar use to reach the capital of Naboo and rescue Queen Amidala and her escort. The group departs for Coruscant, the Galactic Republic's capital planet, to seek help from the Senate.

During the escape, the ship is attacked by the Federation blockade, forcing R2-D2, one of the ship's droids, to fix the shields. The attack damages the ship's hyperdrive, forcing the party to land on the desert planet of Tatooine for repairs. While searching for needed parts, Qui-Gon and a handmaiden named Padmé befriend young Anakin Skywalker (Jake Lloyd), a nine-year-old human slave gifted in piloting and mechanics. Qui-Gon senses a strong presence of the Force in Anakin, and feels that he may be the "Chosen One" an individual the Jedi believe will fulfill a prophecy by bringing balance to the Force. Anakin's master, Watto turns out to own the parts required to repair Amidala's ship, but Qui-Gon has no way of paying him, as the Republic's currency is worthless on Tattooine. At Anakin's insistence, Qui-Gon enters Anakin in the Boonta Eve Podrace in a bet with Watto, to gain the needed parts and Anakin's freedom. Anakin eludes several obstacles including rival racer Sebulba to win the race, gaining his freedom and bankrupting Watto. After hesitation, Anakin leaves his mother and his droid, C-3PO (Anthony Daniels), behind on Tatooine to go with the Jedi. As the group prepares to depart, they are attacked by the Sith apprentice Darth Maul (Ray Park), who battles Qui-Gon until the heroes escape.

On Coruscant, Qui-Gon informs the Jedi Council of the mysterious, well-trained attacker. The Council becomes concerned that this may indicate the reappearance of the Sith, an opposing order that followed the dark side of the Force and had long ago disappeared. Qui-Gon informs the Council about Anakin, hoping that he can be trained as a Jedi. After testing the boy the Council refuses, worried that he is too old for training and that the fear and anger that he harbors will cloud his future. Meanwhile, Senator Palpatine (Ian McDiarmid) of Naboo persuades Amidala to call a vote of no confidence in Chancellor Valorum. The vote removes Valorum from power and leads to Palpatine's nomination for the position, which Amidala considers too late to be effective. To stop the Federation invasion by herself, the Queen decides to return to Naboo with her security team, the two Jedi, R2-D2, Anakin, and Jar Jar.

On Naboo, Padmé reveals herself as Queen Amidala and forms an alliance with the Gungans for the battle against the Trade Federation. The Gungans march into battle to divert the Federation army away from the capital, allowing the others to infiltrate the palace. Once inside the palace hangar, the Jedi free several Naboo pilots, who regain their starfighters and assault the Federation droid ship. As they make their way to the throne room, the infiltration team is confronted by Darth Maul. Qui-Gon and Obi Wan engage Maul while the others take an alternate route. Qui-Gon and Obi-Wan duel with the Sith Lord amongst the catwalks of a massive power-generating reactor core. Obi-Wan is briefly delayed, separating him from Qui-Gon and Maul. Meanwhile, Queen Amidala and her forces fight their way into the palace and capture Nute Gunray, Viceroy of the Trade Federation. Anakin - who inadvertently joined the dogfight in space - destroys the droid-control ship's reactor with proton torpedoes, which deactivates the droid army in the midst of taking Gungan prisoners. In the reactor core, Qui-Gon re-engages Darth Maul singlehandedly, but is mortally wounded. Obi-Wan catches up with and defeats Maul in another intense lightsaber battle. With his final breath, Qui-Gon instructs Obi-Wan to train Anakin to become a Jedi.

In the aftermath, the newly elected Supreme Chancellor Palpatine congratulates Queen Amidala on her victory and promises to watch Anakin's career with great interest. Meanwhile, the Jedi Council promotes Obi-Wan to the level of Jedi Knight, and Yoda reluctantly accepts Obi-Wan's request to train Anakin as his padawan. During Qui-Gon's funeral, Mace Windu (Samuel L. Jackson) and Yoda (Frank Oz) agree that the person who killed Qui-Gon must have been a Sith, but as the Sith are known to have only a master and an apprentice, they are unsure which was killed. A large celebration is held on Naboo to celebrate the world's liberation and the newborn alliance between the Naboo and the Gungans.