The Doctor, suffering from post-regeneration effects, lands the TARDIS near Rose Tyler's flat, where she, Jackie and Mickeycarry him into bed and dress him in bedclothes from Jackie's ex-beau. With little to do but wait for the Doctor to recover, Rose and Mickey go Christmas shopping. While out, they are attacked by masked Santa robots, and retreat to the safety of the flat, but find themselves facing an attack from whirling lethal Christmas tree. The Doctor wakes, repels the attack and theorises that the energy of his regeneration is luring the unseen foe to him. Rose, Mickey, and Jackie keep a vigil while the Doctor rests, as he needs more time to recover.

Meanwhile, Prime Minister Harriet Jones and her science team prepare for a live broadcast across the globe from the space probe, "Guinevere One", once it lands on Mars. They are unaware it has been swallowed by a giant spaceship heading for Earth. When the broadcast is shown, an alien face appears. The Sycorax aliens demand Earth's surrender, and cause approximately one-third of the world's population to go into a hypnotic state and pose themselves on the edges of the tallest buildings nearby. The Sycorax threaten to send a signal to make them step off to their deaths if the invaders are not given half of the world's population as slaves. One of the technicians discovers all the hypnotised people share the same blood type, the same as contained in a sample on "Guinevere One". Harriet attempts further negotiations with the Sycorax, and is surprised to find herself and her staff transmatted aboard the ship.

As the Sycorax ship moves over London, Rose, Mickey and Jackie evacuate the Doctor to the TARDIS, but before Jackie can return with additional supplies, the TARDIS is detected by the Sycorax and is transported aboard their ship. When Rose and Mickey attempt to leave, they are shocked, accidentally dropping a container of tea that pours over the TARDIS innards, which begin to smoke. Rose attempts to use the same ploys the Doctor has in the past to scare the Sycorax, but they are not intimidated. This, however, gives enough time for the Doctor to fully recover, rejuvenated by the smoke from the spilled tea. He reintroduces himself to Rose, Mickey, and Harriet, and presses the button that would make the hypnotised humans jump, but he knew the hypnosis couldn't coerce those affected to kill themselves, therefore freeing them. The Doctor challenges the Sycorax leader to a sword fight for the fate of the Earth. During the fight, the leader slices off the Doctor's hand, which falls into the heart of London. But because the Doctor is still within the first 15 hours of regeneration he is able to grow a new hand, and then forces the Sycorax leader to submit. As the Doctor and his allies return inside the ship, the Sycorax leader attempts to attack the Doctor from behind. The Doctor hits a sensor with a fruit he found in his bathrobe, part of the wing folds and the leader falls to his death.

The Doctor forces the remaining Sycorax to leave Earth and promise never to return, and then returns to Earth with Rose, Mickey, and Harriet. As the Sycorax ship moves away, Harriet remotely orders "Torchwood" to fire, causing five laser cannons to strike the ship and destroy it. The Doctor becomes furious with Harriet, who responds that it is their last defense when the Doctor is not present to save the world. He warns her not to challenge him, saying that he could bring down her government with six words. When Harriet firmly stands behind her decision, the Doctor walks over to her aide and whispers: "Don't you think she looks tired?" That evening, as snow (which is actually the ash from the destroyed ship) falls on London, the Doctor selects his new outfit from the TARDIS wardrobe, and joins Rose, Jackie, and Mickey for Christmas dinner. They watch Harriet Jones on the television, fending off rumours about her ill-health and a pending vote of no confidence in the House of Commons. The Doctor and Rose then get ready to set off again for more travels across space and time.