The U.S.S. Enterprise has been selected to take part in some war game exercises in which Kirk's vessel is to be put under the command of a new type of computer called the M-5. The inventor, Dr. Richard Daystrom, arrives on board the Enterprise where, after a briefing meeting, Scotty is ordered to connect the machine despite his concern that the previous four prototypes had proved to be failures. The M-5 is allowed to control the Enterprise on its way to the testing area where Kirk resumes command. Daystrom and Spock talk him into transferring complete command to the unit and Scotty immediately reports that it is shutting systems down all over the ship. Daystrom tells him that this is normal as the Enterprise is only operating with a skeleton crew and M-5 is conserving power for its own consumption.

Two vessels are detected by the ship's sensors and identified as the starships Lexington and Excalibur. Commodore Wesley, commanding the Lexington, advises that this is an unscheduled test and a mock battle follows which M-5 wins easily, despite being outnumbered, due to its ability to react to situations more quickly than its human opponents. Kirk is disconsolate at the machine's success and McCoy visits him in his quarters to console and reassure him. Spock reports another vessel sighting which proves to be an unmanned ore carrier called the Woden.

M-5 goes to battle alert and, despite attempts to disconnect it, destroys the freighter. The machine has protected itself with a force field and a crewman is sent to cut the power but is electrocuted, which Daystrom insists is purely an accident.A meeting is held where Spock puts forward a plan to activate a manual override from relays on level three, which he and Scotty proceed to carry out. Daystrom is completely against removing M-5 from command leading McCoy to suggest to Kirk that he may be tampering with the unit. Kirk insists that they must regain control of the ship before it reaches the next designated war game area.

Daystrom tries to stop Scotty and Spock from carrying out their task and has to be restrained by Kirk. They complete the job but find that M-5 has fooled them by re-routing the controls and leaving the circuits they were working on live to make them think that they were active. Under questioning, Daystrom reveals that M-5 thinks like a human as it has human engrams impressed on its circuits. The Enterprise reaches the war game zone and is approached by four starships. Kirk and the others watch helplessly as M-5 raises shields and fires the phasers, scoring hits on the unsuspecting Lexington and Excalibur.

Fifty-three people are killed in the attack and Wesley contacts the Enterprise ordering them to break off the attack. M-5 fires on the U.S.S. Potemkin before turning its attentions back to the Excalibur, which it destroys. Spock suggests that Daystrom tries to communicate with the machine as it is his engrams which are impressed on the unit's circuits. He does so, but M-5 dismisses his arguments by saying that it was only trying to defend itself. Daystrom becomes increasingly irrational and has to be subdued by Spock with a Vulcan neck pinch when Kirk tells him that the unit will have to be destroyed. Meanwhile, Wesley on the Lexington has received orders to stop the Enterprise at all costs, destroying the ship if necessary.

Kirk desperately engages the machine in a theological discussion, telling it that it has broken the laws of man and God. The unit accepts Kirk's reasoning and agrees with him that it must be punished. It immediately shuts down, leaving the Enterprise wide open to attack. Scotty and Spock manage to restore some control before the Lexington approaches to attack but cannot restore communications in time. Kirk orders the ship's shields to be dropped, leaving the Enterprise defenceless. Wesley takes a chance on it being a trick and calls off the attack, much to Kirk's relief. When Spock enquires how he knew that Wesley wouldn't press home the attack Kirk tells him that he hoped Wesley would show compassion which, McCoy observes, is the one thing that a machine could never have done.