The movie begins with an American manned landing mission returning, in 2018, to the Moon. The lander carries two astronauts; one of them a black male model, James Washington (Christopher Kirby) specifically chosen to aid the current President of the United States (Stephanie Paul) in her re-election. Upon landing on the dark side of the Moon, the two encounter the Nazis who have been there since 1945, and Washington is taken captive.
The Nazi scientist Doktor Richter (Tilo Prückner) is called in to investigate Washington and finds his smartphone. Although initially skeptical, he recognizes that the computing power of this device far outmatches anything they have come up with themselves and integrates the device into the Götterdämmerung, the Nazi space battleship. Unfortunately for Richter, the phone stops working due to an empty battery just as he is demonstrating its power to his superiors, especially the new Führer Wolfgang Kortzfleisch (Udo Kier). Nazi commander Klaus Adler (Götz Otto), who is (for genetic reasons) destined to marry Earth specialist Renate Richter, daughter of Doktor Richter (Julia Dietze) offers to go to Earth to find another device with the same computing power. Adler takes a spacecraft to Earth, taking Renate and James with him, the latter having been Aryanized (i.e. his skin turned to white) by Dr. Richter.
Meanwhile on Earth, the President of the United States is having some problems of her own; she desperately needs a miracle to ensure her re-election. Her aide, Vivian Wagner (Peta Sergeant) presents her with the two Nazis. Adler and Richter go on to transform the Presidents' campaign Nazi-style, with apparent success, although Richter is unaware of the plans of Adler to both annihilate the United States and of overthrowing the current Führer.
After three months, Kortzfleisch seems to have figured out Adler's plan. He sends his armada (without the Götterdämmerung) to Earth orbit. He himself lands on Earth, confronting Adler; at the same time, Renate Richter finds Washington, now a homeless person, in the streets and recognizes Adler's true intent as well. Adler kills Kortzfleisch and takes his position, returning to orbit with Kortzfleisch's flying saucer.
The United Nations meets to discuss the Nazi threat in orbit. The President is thrilled to finally have a war which will likely get her re-elected, and appoints Vivian Wagner as commander of the spacecraft USS George W. Bush, which orbits the Earth carrying nuclear weapons. As it turns out, most other nations have also developed armed spacecraft (all against international agreements) and join in to defeat the invading Nazi armada.
Back on Earth, Richter convinces Washington to come with her back to the Moon to stop Adler. They take their flying saucer back to the Moon and to the Götterdämmerung, where Washington attempts to disable the weapons system (thereby confronting Doktor Richter) while Renate goes looking for Adler. Meanwhile, the international space craft armada has destroyed the Swastika moon base and is heading for the Götterdämmerung as well. In the final battle, Washington manages to disconnect the tablet device now controlling the Götterdämmerung while Richter takes out Adler. The spaceship crashes into the Moon, but not before Adler has taken out a considerable chunk of the Moon attempting to get a clear shot at the Earth.
The U.S. President calls Wagner from the UN session, congratulating her on her victory. However, Wagner mentions the large tanks of Helium-3 she has seen on the Moon. As it turns out, this material would keep the U.S. independent of foreign power sources for a millennium; thus, the President immediately lays claim to it. As a result, the UN members and the international spacecraft start attacking each other resulting in apparent mutual destruction of the spacecraft.
Richter meets up with Washington (now turned back to black) in the burning Swastika moon base, where they kiss to the unbelieving eyes of the other Nazis. Richter remarks that "a lot has to be done still". The final moments of the film show the Earth, where ballistic missiles are launched across the globe. At the very end of the credits, the planet Mars is revealed with a man-made satellite of undetermined origin in orbit.
The story takes place in an alternate universe in contemporary era (2018), where the US is led by a female President.
- United States, Earth
- The US sends a moon mission to the Moon, which attracted the attention of the Space Nazis who are planning to annihilate it. On the Nazis defeat, the US claims the vast helium-3 reserves found on the moon sparking a worldwide space war.
- Nazi moon base, the Moon
- The Nazis built a moon base on the far side of the Moon after its defeat in 1945, and by 2018 is looking forward to return to Earth and annihilate the US. Amidst the struggle among their inner ranks they were defeated.
In Downfall parodies
One particular scene in this film has been modeled around the Original Bunker Scene in Downfall. The most commonly used line in most Downfall parodies is actually used in Iron Sky ("Anyone who is not a Head of the Department... should leave.") as opposed to Hitler dismissing all except his four generals in Downfall.
- Götz Otto, who portrayed Otto Günsche in Downfall, also appears in this film.
- More than 10 percent of funding for this film came from fans. The donors are listed in the credits.
- The President is most likely modeled after Sarah Palin.