The episode begins with Ben taking a swim in a lake at night. He does a cannonball, and he does cheers for his own achievement. Gwen comes by, and he invites her to join him, but she declined his offer. She doesn't want to come in contact with all strange creatures that might be in the water, citing Ben as a good example. As she heads back to the RV, Ben seems to begin drowning. She hears him, and Ben has been fully-submerged in the water before seeing him after she came to take a look at what's happening. In his place, a giant slimy monster emerges, scaring Gwen. Afterwards, she does realize on closer inspection that it was merely Ben as Four Arms, covered with plants and slime to create the perfect monster illusion. Gwen storms off to Grandpa Max as Ben takes a good laugh at her expense. Once she is gone, a real monster appears and attacks Ben. A short fight between them results in the monster as the victor. Unable to find it, Ben heads back to the RV to warn Gwen and Grandpa Max. They don't believe his story, of course, since he has just pulled a similar prank.
The next morning, the three head out to the pier for a fishing trip. Ben talks about his event with the giant monster to Grandpa Max, but he chalks it up to some kind of fish that probably looked larger than it normally was. Upon reaching their boat, Ben spots a bucket of bait, and holds a handful to Gwen, telling her that it is breakfast. Grandpa Max tells her that it is only bait, but she is disgusted and decides to stay on the beach, rather than join them. She leaves, and Grandpa Max gets the captain's attention, saying that they are ready. His name is Shaw. Grandpa Max then explains that they've chartered the boat, but Shaw's impatience grew and told them to go immediately on board.
On the water, Grandpa Max tries to make small talk with Captain Shaw. He has limited success, though enough to provoke him to notice that Ben is leaning over the edge, guessing that he's probably seasick. This is not the case, however, for he is merely keeping a close eye for the giant creature he saw. A nearby log with a tub hanging on it tricks his vision, after mistakenly interpreting it as the creature. Grandpa Max tells Ben that their trip is nothing else but a fishing trip, but Shaw backs up Ben's claim. He says that the creature he saw was called the Krakken. Shaw says that he has been tracking the beast for some time now, which explains his given reputation for being crazy, which doesn't surprise Grandpa Max. Shaw mentions a place where he'd seen it and offers to take them. Grandpa Max can't help but accept his offer upon seeing Ben's delight.
On the way, Shaw shows off his equipment on board made for tracking the Krakken. Grandpa Max tries to convince Ben that Shaw's reputation is deserved, but he doesn't agree with him. They then are nearing their destination, though find the area cordoned off. Before Shaw continued on, another boat pulls up beside his. On it, a man named Jonah Melville informs them that the organization Friends of Fish, which he claims he founded, is conducting an environmental study in that section of the lake and needs him to turn around. Shaw doesn't want to, but Grandpa Max makes him since that boat is currently chartered to him. When Ben mentions the Krakken, Jonah explains it as an old nonsense story. Ben is still not convinced.
As they are escorted back by Jonah, Shaw's sonar picks up an object heading towards their boat. At first glance, it appears to be a large shark. Shaw and Ben think otherwise, believing it to be the Krakken. Sure enough, it gets closer, and its silhouette shows that it is far too large to be a shark. It passes under their boat, and realize that its target is the docks.
At the docks, Gwen is happy to be by herself. Her enjoyment is then interrupted after Shaw uses the air-horn on his ship to warn those at the docks. Gwen figures that it is another one of Ben's jokes, but the appearance of the Krakken immediately turned her claim around. The Krakken finally shows itself in daylight, and it is an impressive sea creature. It resembles a dinosaur, and it is a beast of massive detail. The odd thing about it is its mouth, which despite having a row of sharp teeth, and has two mouth-like tongues that it cannot draw back into its mouth. It completely destroys the dock, sending Gwen and many others into the water.
Back on the boat, Shaw gloats over his claim about being right about the Krakken. Grandpa Max sends him back to steer the ship and tells Ben to rescue the people in the water. He quickly gets ready, intending to turn into an alien form he calls Ripjaws. However, it does not turn out this way. Instead, he ends up as XLR8, much to his annoyance. He has no other choice but to use what he has. He begins to swim to Gwen and quickly realizes that he is fast enough to run on water. His speed allows him to save not only Gwen, but also every other person almost in an instant.
On Jonah's boat, he orders his crew to get moving. The Krakken, which is holding another boat, notices his boat and chases after them. It almost sank their boat, but Ben arrives just in time to scare it away. Ben hops onto their boat, and the Krakken returns to grab a crate marked CANNERY, sitting right on the boat's deck. Jonah is concerned about the crate, trying to drag it away from the Krakken. At least Ben is onboard to help him out. It leaves, and he questions Jonah for the crate's importance. Jonah however is evasive about the contents of the crates, saying that it is their lunch. Ben is extremely confused for helping them just for that, but immediately ignores it when the Krakken comes back and uses its tongue to grab the crate. The Omnitrix then signals the ending of his transformation, and immediately leaving Jonah upset. Ben runs as fast as he can back to his boat, but reverts back before making it onboard. Grandpa Max notices Ben and tells Shaw that he is overboard, interrupting his process of aiming a harpoon directly at the Krakken. He gives up, and promises to get it next time.
Later that night, everyone is packing up and leaving. Ben is telling Gwen and Grandpa Max that he and Shaw were right about their sightings. Grandpa Max still thinks that Shaw is crazy and wants Ben to stay away from him. Ben wants to help Shaw catch the monster, but Grandpa Max insists that he should leave it be. Shaw then passes by, insulted by the Friends of Fish for shutting down the whole lake. He insists that it won't stop him from catching the Krakken.
Later, Gwen and Grandpa Max get ready for sleep. They wonder what is taking Ben so long in the bathroom. Grandpa Max opens the door to check on him, only to discover that he is not there. Instead, he is on Shaw's boat, which Shaw quickly learns, though he doesn't seem bothered about it. Upon reaching the spot, Shaw prepares himself to dive in and look for the Krakken himself, calling himself as "live bait". Ben insists that he should go with him, but Shaw calls his harpoon gun as the only companion he needs. Shaw jumps overboard, and he finds a giant egg in a nest. He studies it, and noticed something behind him. He fires a harpoon, only for the figure to dodge. As it got closer, it was just Ben. Shaw shows Ben the egg and then swims back up.
Back at his boat, Shaw finds an armed speedboat parked right next to his. He boards back onto his boat, and three men in diving gear pull him up to interrogate him. Shaw admits that he saw nothing, including Ben's presence, so the lead man knocks him out. Upon removing his mask, it turns out to be Jonah. He has his crew drag Shaw on his boat to question him further at the cannery. Ben wants to help, but finds that his Omnitrix is still recharging. Jonah activates a tracking device and tosses it into the water where the nest is. He then throws a bomb onto Shaw's boat, making Ben's situation worse. Luckily, after they drive off, the Omnitrix is fully recharged.
Jonah and his men head for the cannery, and they notice something coming. One of them thinks it is a bird. The other thinks it's a plane. Jonah, however, figures out that it's a giant bug, more specifically, Ben in his Stinkfly form. Upon seeing Ben, they attempt to shoot him down, but Ben is able to shoot their weapons off with slime. Jonah then begins to release the depth charges attached to the back of his boat. None of them hit Ben, but one explodes large enough to submerge him, rendering his wings useless. Lucky for Ben, a nearby log allows him to get out of the water. As they search for him, Ben hides until his wings can dry. The Krakken shows up at this moment, forcing Jonah to dump Shaw overboard to escape. Ben is able to rescue Shaw before he's submerged into the water, and avoid being eaten by the Krakken.
Ben heads for dry land, while carrying Shaw with difficulty. To make things worse, the Omnitrix begins to lose power. He gets close enough however, before reverting to reach the awning of the RV. In the RV, Ben explains the reasoning behind the Krakken attacks. Because Jonah had been stealing her eggs, she's been working hard to protect them. Gwen then finds information on Jonah, and they find out that he hunts rare animals and sells them to the highest bidder. Ben wants to get the eggs back, but Shaw is only focused on capturing the Krakken. He says that he has a spare boat at the docks.
They reach the docks, while Gwen calls the police. Shaw unties the boat, and the other three leave him behind. Shaw becomes annoyed, but quickly spots a simple rowboat to replace it.
At the cannery, Jonah has already retrieved the egg using a roughly human-shaped miniature sub. His henchman is loading it into a large container with a second egg. The trio arrives as he gloats over how much money they're going to make with the eggs. Ben sends Gwen and Grandpa Max up to find the eggs while he stays behind to deal with the poachers. He sets the Omnitrix to a silhouette of a fish-like alien and activates it. This turns him into the alien Ripjaws, an aquatic alien and the perfect underwater predator. The Krakken shows up to retrieve its eggs. The poachers attempt to shoot it off, only to find its skin is too thick to penetrate. They flee, and one is knocked into the water. Jonah heads to the minisub to fight the Krakken, only to have similar luck. Ben hops out of the water to assist in the fight, and it quickly turns into a three-way battle between him, Jonah, and the Krakken.
Inside the cannery, Gwen and Grandpa Max sneak around in an attempt to catch one of the henchmen off-guard. He's currently picking up a rather large weapon off of a rack. As they sneak in, Grandpa Max makes use of hand signs probably associated with some sort of government training. Meanwhile, the poacher who was in the water climbs back up and finds them. Despite being at gunpoint, Grandpa Max threatens the poacher, asking him if he'd like to do things the easy way, or the hard way. The Krakken's tail pokes through the building at the right moment to provide a distraction, allow Gwen and Grandpa Max to ride on hooks attached to the ceiling. As they pass by the poacher, the Krakken's tail sends him back into the ocean. The second poacher is knocked out through a team effort by Gwen and Grandpa Max.
Ben and Jonah continue to fight over the eggs, dodging attacks from the Krakken as they do. Jonah's minisub proves to be a formidable opponent, possessing several devices meant specifically to be used on aquatic creatures. Ben finally catches a break when they end up at Shaw's sunken boat. By using the anchor, Ben is able to fight Jonah off and eventually removes one of the limbs of his minisub. He then takes the eggs back to the Krakken's nest, appeasing it. Jonah attempts to steal the eggs one last time and the Krakken bites his minisub in half for the attempt. Jonah then attempts to stab the Krakken, only to have his knife break. The Krakken almost devours him, but Ben intervenes and it goes back to its eggs. Ben though, knocks Jonah out and leaves him hanging from some wreckage for the police to find.
Grandpa Max is glad to see Jonah arrested. At the same time, Shaw shows up in his rowboat, claiming to have caught something. On closer inspection, it is Ripjaws that he has captured. As Shaw gloats about what he claims as one of the Krakken's offspring, Ben reverts back to human form. Grandpa Max points this out, confusing Shaw. The episode ends with a scene showing the Krakken reunited again with its eggs.