MASTERS OF THE UNIVERSE

On the planet Eternia, the warlord Skeletor seizes control of Castle Grayskull, the center of power in the universe. His army scatters the remaining Eternian defenders and captures the Sorceress of Grayskull, imprisoning her within a power-draining field and planning to seize power over the entire universe by the next moonrise. Skeletor's archenemies—the warrior leader He-Man, veteran soldier Man-At-Arms, and his daughter Teela—rescue Thenurian locksmith Gwildor from Skeletor's troopers. Gwildor invented a "Cosmic Key" that can open a portal to anywhere by using musical notes, which was stolen by Skeletor's second-in-command Evil-Lyn allowing Skeletor to breach Castle Grayskull.

With Gwildor's remaining prototype of the Key, He-Man and his friends breach the Castle. They attempt to free the Sorceress, but are overwhelmed by Skeletor's army and forced to flee to Earth through a portal opened by Gwildor's Cosmic Key. The Key is lost upon their arrival and discovered by two California teenagers—orphaned high-school graduate Julie Winston and her boyfriend, aspiring musician Kevin Corrigan. While experimenting with the device, they accidentally transmit a signal. Tracking it, Evil-Lyn sends Skeletor's henchmen Saurod, Blade, Beastman and Karg to recover the device.

Kevin believes the Key to be a new synthesizer and takes it to a music store run by his friend Charlie. At the school, Skeletor's henchmen arrive through a portal and chase Julie, who is rescued by He-Man while he and his companions search for the Key. The henchmen retreat to Grayskull where, incensed by their failure, Skeletor vaporizes Saurod and sends the others back to Earth, with a larger force under Evil-Lyn's command. Kevin returns to the school to find police investigating the damage caused by Skeletor's men, and no sign of Julie. Kevin is taken to Julie's house by Hugh Lubic, a detective investigating the disturbance. They find no trace of Julie, but Lubic is suspicious of the Key, which he suspects Kevin may have stolen. He confiscates it and leaves for Charlie's store to verify Kevin's story. Evil-Lyn and her team break into the house and interrogate Kevin regarding the Key's location using a mind-control collar, before pursuing Lubic.

Julie and the Eternians arrive and release Kevin from the collar, then pursue Lubic and the Key. They arrive at Charlie's store, but Skeletor's forces intercept them and a battle ensues. Evil-Lyn recovers the Key and summons Skeletor to Earth. Skeletor's forces capture the Eternians and wound Julie, which simultaneously erases the memory storage of Gwildor's Key. He-Man surrenders to save his comrades and is returned to Eternia as Skeletor's slave. Skeletor attempts to torture He-Man into submission to make his victory complete, but He-Man refuses to yield. The moment arrives for Skeletor to receive the power of the cosmos and declare himself the Master of the Universe.

On Earth, Gwildor repairs the Key, and Kevin re-creates the tones necessary to create a gateway to Eternia. The group, including Lubic as he attempts to arrest them, are transported to Castle Grayskull and begin battling Skeletor's forces. Resenting that Skeletor absorbed the power of the universe without sharing it with her, Evil-Lyn orders Karg to sound the retreat. He-Man retrieves the Sword of Grayskull and shatters Skeletor's staff in a duel, restoring the latter to his normal state. He-Man offers mercy, but Skeletor draws a concealed sword and attempts to kill him. To stop him, He-Man knocks Skeletor into a pit below to his apparent death. The freed Sorceress heals Julie, and Gwildor opens a portal to send the Earthlings home. Hailed as a hero for his bravery, Lubic decides to remain on Eternia.

Julie awakens on the morning of her parents' deaths in a plane crash. Realizing the Key transported her back in time, she prevents her parents from taking the ill-fated flight. Kevin later confirms to her that their experiences were real, producing a souvenir from Eternia: a sphere containing a scene of He-Man with his sword in front of Castle Grayskull.

In the post-credits scene, Skeletor's head emerges from the water in the pit saying "I'll be back!"

Skeletor absorbs the universe's power and tries to force He-Man to submit, but He-Man and his allies rally to confront him in Castle Grayskull, leading to Skeletor's defeat and restoration of peace to Eternia.

The ending resolves the central struggle of good versus evil, as He-Man's refusal to kneel underscores his role as the heroic champion. The restoration of the Sorceress and defeat of Skeletor reestablishes order in Eternia, satisfying the film’s promise of cosmic-scale heroics and leaving the door open for future adventures.