The game opens with a battle against the Foot Clan and Hun in Oroku Saki's skyscraper. The Foot are beaten, but Master Splinter mysteriously vanishes. The Turtles trace him to a building marked "T.C.R.I.," which hides a strange secret: its employees belong to a brain-like alien race, the Utroms. While fighting these new foes, the Turtles are accidentally teleported across the galaxy, meeting the Fugitoid Professor Honeycutt on D'Hoonib and getting caught in the crossfire of the war between the Triceratons and the Federation, both of whom want Honeycutt for his technology. They also cross paths with an intergalactic bounty hunter named Slashuur, legendary as the most powerful in the universe, who has been hired by the Triceratons to capture Honeycutt. After the Turtles defeat him, Slashuur reveals he knows of Hamato Yoshi before departing. Before leaving the Triceraton Homeworld, the Turtles free a noble Triceraton gladiator named Traximus.
Back on Earth at the T.C.R.I. building, it's revealed that the Utroms rescued an injured Splinter and have been caring for him. They place the Turtles and Splinter in a virtual reality machine to explain their origins: centuries ago, the Utroms were transporting a murderous member of their species, Ch'rell, when their ship crashed in Japan. Ch'rell escaped while the Utroms waited for Earth's technology to advance enough to send them home. Later, after enlisting humans as Guardian Ninja, the Utroms were ambushed by an armored warlord known as The Shredder. Meanwhile, in the real world, Baxter Stockman sabotages the VR machine, making its dangers lethally real to the Turtles and Splinter. After defeating Shredder and his Feudal Foot Ninja, the Turtles meet the Utrom Mortu, who gives them a device to return to reality — only to find Shredder and the Foot assaulting the T.C.R.I. building. During the fight, an organic destruction device is planted and the Utroms escape through their Transmat. The Turtles defeat Shredder, revealing him to be not only the same one from Feudal Japan but the evil Utrom Ch'rell himself. The Turtles escape before the device detonates; Ch'rell is not so fortunate.
Later, in the sewers, the Turtles meet a giant anthropomorphic alligator named Leatherhead. After a brief scuffle, he realizes they're allies and shares his origin: found as a baby gator by an Utrom and adopted, he was transformed by contact with Retromutagen Ooze, much as the Turtles were, and lived with the Utroms as family. When the T.C.R.I. building exploded, he fled to the sewers and took up residence in the Turtles' old lair, trying to build his own Transmat to follow the Utroms. His partner in this, however, turned out to be Baxter Stockman, only feigning alliance. Exposed, Baxter hurls a chemical tank and flees, collapsing the lair's ceiling. Leatherhead urges his new friends to flee while he holds back the falling rubble — and the Turtles escape just in time to watch the ceiling cave in completely on him.