Four years after the battle of Chicago, the world has turned against all Transformers. Humanity, having suffered immense collateral damage from the previous wars, now hunts both Autobot and Decepticon. A military task force known as the TRF (Transformers Reaction Force) enforces the new order, forcing the remaining Autobots into hiding. Inventor Cade Yeager, still protecting his alien friends, lives as a fugitive in a junkyard alongside the Autobots Bumblebee, Hound, Drift, and Crosshairs, as well as a young orphan named Izabella and her small damaged Autobot companion Sqweeks.

Far from Earth, Optimus Prime, who left to find his creators, discovers the devastated remains of his homeworld, Cybertron. He is found by Quintessa, a powerful sorceress who claims to have created the Transformers. She brainwashes Optimus, corrupting him into Nemesis Prime, and sends him back to Earth on a mission to retrieve a legendary artifact known as the Staff of Merlin. Quintessa intends to use the staff to drain energy from the Earth, repairing Cybertron but completely destroying humanity in the process. She also reveals that Earth itself is actually the dormant form of Unicron, a colossal evil entity.

As Nemesis Prime begins his rampage, the human and Autobot resistance discover that the Transformers have secretly influenced human history for centuries. An eccentric British lord and historian, Sir Edmund Burton, along with his robotic butler Cogman, reveals that a grand alliance existed between the Autobots and the Knights of the Round Table. The powerful staff belonged to the wizard Merlin, who was actually a fraud given his powers by a Cybertronian knight. The staff was hidden to protect it, and its exact location is a secret passed down through Merlin's bloodline.

Sir Edmund recruits Cade Yeager and an Oxford professor named Vivian Wembley, who is revealed to be Merlin's last living descendant. As the unlikely trio searches for clues leading from England to Nazi Germany and the bottom of the sea, they are pursued by both the human TRF and the Decepticons, now led once again by Megatron. Megatron has formed a fragile alliance with Quintessa, believing he will be rewarded with control over Earth.

The climax occurs at Stonehenge, which is actually a key mechanism for activating the staff. Cybertron begins phasing into Earth's atmosphere, causing catastrophic geological destruction. As the planet tears itself apart, the Autobots and their human allies stage a final assault. Vivian successfully claims the staff, but is captured by Megatron. Cade and Bumblebee face the corrupted Optimus Prime. In a critical moment, Bumblebee speaks in his true voice for the first time in years, calling out to Optimus as an old friend, which breaks Quintessa's mind control. A restored Optimus Prime retrieves the staff and destroys Quintessa. He then drives the staff into the ground, causing Cybertron to phase away from Earth and saving the planet. In the aftermath, Optimus declares that the Transformers will now stand with humanity as true knights, ending their war.