Battle Angel Alita tells the story of Alita ("Gally" in the original Japanese version), an amnesiac female cyborg. This cyborg's intact head and upper torso are found in a state of suspended animation by the cybermedic expert Daisuke Ido while he is out searching for useful scrap. Ido manages to revive her, and upon finding that the girl has lost her memory, he names her Alita after his recently deceased cat. The rebuilt Alita soon discovers that she possesses instinctive knowledge of the legendary martial art Panzer Kunst, although she has no other memories of her previous life. Alita uses her Panzer Kunst as a link to her lost past, which leads her to first becoming a mercenary Hunter-Warrior, killing cyborg criminals in the Scrapyard, and then a player in the brutal sport of Motorball. While pushing her limits in combat, Alita awakens memories of her earlier life on Mars. She becomes entangled in the machinations of Tiphares as one of their agents, and is sent to hunt those who wish to bring the floating city down. Foremost among these is the mad genius Desty Nova, who clashes with Alita before becoming her ally. Together, they take on the dark secrets of Tiphares.
The futuristic dystopian world of Battle Angel Alita revolves around the city of Scrapyard, grown up around a massive scrap heap that rains down from Tiphares (Zalem or Salem in the anime), a mysterious city floating above the Scrapyard. Ground dwellers have no access to Tiphares and are forced to make a living in the chaotic, violent sprawl below. Many of them are heavily modified by cybernetics to better cope with the hard life in the Scrapyard.
Tiphares exploits the Scrapyard and surrounding farms for its needs, paying mercenaries (called Hunter-Warriors) to hunt criminals and arranging violent sports to keep the population in check. Massive tubes connect the Scrapyard to Tiphares, and the city sends robots through the tubes for carrying out errands and providing security on the ground. Occasionally Tipharean citizens (such as Ido Daisuke and Desty Nova) are sentenced to exile and sent to the ground. Aside from the robots and exiles, there is little to no contact between Tiphares and the Scrapyard.
The story takes place in the former United States. In the map presented in the eighth volume, the locations and geological formations closely correlate to particular cities. According to this map, the site of the Scrapyard/Tiphares is at Kansas City, Missouri, and the Necropolis is Colorado Springs, Colorado. The surrounding Farm Factories that support Tiphares also correspond to real cities; Farm 21 and Farm 22 are Sweetwater, Texas and Garden City, Kansas respectively. Radio KAOS is at the site of Dallas/Fort Worth. Figure's coastal hometown, Alhambra, is a real place in Southern California, and Desty Nova's Granite Inn is said to have been built out of a military base - assumed to be the NORAD main technical facility at Cheyenne Mountain, Colorado.
Battle Angel Alita is late in the series revealed to take place in the 26th century. The dating convention used by the characters in the story is years after ES (Era Sputnik), based on the launch of Sputnik 1 in 1957. About fourteen years pass after Daisuke Ido discovers Alita in the first graphic novel. This places the entire Battle Angel Alita manga mostly between ES 577 and ES 591, or 2533 and 2547 AD.