The plot of the game is almost the same as the plot of the film.
Larry Daley is the CEO and founder of the company Daley Devices, and learns that the Museum of Natural History, where he once worked as a night guard and found out that the exhibits come to life every night, is having renovations, replacing the wax figures and stuffed animals with state-of-the-art 3D holograms. Larry returns to the museum, where he learns from Jedidiah the miniature cowboy and Octavius the Roman general that because of the renovations, they will be shipped to the Federal Archives (Octavius mistakenly calls it the Imperial Archives) under the Smithsonian Museum, aside from Rexy the T-Rex skeleton, Ahkmenrah and his tablet, (which is the source which makes the exhibits come to life) the Easter Island Head (nicknamed Dumb-dumb), and other signature exhibits will be staying. Larry meets with Ahkmenrah, who teaches him about the several ingots the tablet consists of, explaining that each ingot has a different power. He tells Larry he can use the tablet's powers using his flashlight and key-chain.
After returning home, Larry receives a call from Jed, informing him that the tablet was stolen by the cheeky monkey Dexter while all of them were supposed to be in federal archives without the tablet. Larry rushes to the Smithsonian in Washington DC. He steals a key card from a guard and enters the Federal Archive, and gets the tablet. However, night comes (Larry calls it "magic time" throughout the video game), causing everything to come to life. This brings the evil Kahmunrah, who is Ahkmenrah's evil brother, to life, imprisoning Jed, Dexter and the others. Larry is threatened by Kahmunrah, and is forced to give him the tablet. Kahmunrah smashes the tablet to pieces (an event that did not happen in the film), giving the ingots in the tablet to several other exhibits who are on his side (such as Napoleon, Ivan the Terrible and Al Capone) who hide the ingots. Larry escapes by releasing a squid, who captures Kahmunrah and his servants, escaping with the tablet with only one ingot left. Larry tracks down the exhibits following Kahmunrah, and finds the ingots in several places in the museum, such as the Art Gallery (where he steals the ingot from Ivan the terrible, fixing the exhibits Ivan damaged on the way), the Air and Space Museum (where he steals an ingot from Napoleon) and so on.
In the end, there is a huge battle over the finished tablet, which is won by Larry's friends and Larry banishes Kahmunrah to the Underworld. Like the movie, the game ends with the museum being open late at night and Larry telling his boss Dr. McPhee that he stuck motors in the exhibits, while he actually just brought the tablet home, and having the exhibits come back to life.
