Section 9 is called in to resolve a hostage crisis at a geisha house staffed by android geisha. After the crisis is taken care of, Aramaki is approached by Kubota, who reveals that the Japanese Foreign Minister was being actively investigated by military intelligence after expressing interest in the Ichinose Report, a document detailing diplomatic and military actions to be taken in the event of a national crisis. Given the sensitive nature of the case, Kubota asks that Section 9 take over the investigation where the original team left off.

A heavy-assault multi-ped tank runs amok, under the control of an unknown hijacker using the "recognition code" of the tank's designer, Takeshi Kago, who died a week earlier. After going on a destructive spree at the testing facility, the tank heads towards the urban area of Niihama. Section 9 is called in to stop the tank, as no terrorist group has claimed responsibility, and the JSDF refuses to involve itself unless terrorism is the clear motive.

A series of android suicides prompts Section 9 to investigate the manufacturer, Genesis Androids. While Aramaki questions the plant manager, Kusanagi and a Tachikoma covertly hack into the plant's database to try to uncover any possible wrongdoings by the manufacturer. As it turns out, all the androids were of the same model, an obsolete product known as the GA07-JL android, dubbed the Jeri by its small but loyal fanbase.

Yamaguchi, an old friend of Togusa's and a police detective working in the Laughing Man task force, is murdered after he calls Togusa, requesting to see him concerning what Yamaguchi terms "suspicious internal activity" by superiors in the police department. At Yamaguchi's wake, Togusa is approached by Yamaguchi's wife, who delivers an envelope from him to Togusa that contain a series of strange photographs. Upon scrutinizing the photographs, Togusa realizes that none of them are taken using a camera. Continuing his investigation, Togusa interviews another detective in the Laughing Man task force, who coincidentally mentions that the task force is waiting to bug a primary suspect in the case with cybernetic surveillance devices called "interceptors". The interceptors allow constant audio and visual monitoring of the subject via their own senses. Togusa concludes that the Laughing Man task force members were bugged with these devices illegally for monitoring.

Section 9 suspects that the police investigators handling the Laughing Man case are using their primary suspect, a former Serano Genomics programmer with a shady anti-corporate past named Ei Nanao, as a decoy to hide some form of higher-level corruption. Aramaki orders Section 9 to commence around the clock surveillance on Nanao in an attempt to catch him in the act, but the hacker is killed before he can be brought in for questioning. Elsewhere, Kusanagi meets with her friend Kurutan, a hospital nurse, to use her external memory device in an effort to learn more about The Laughing Man case. However, when the police Superintendent-General is set to give a speech about the Interceptor incident and the Laughing Man case, one of the officers present has his cyberbrain hacked by the Laughing Man. The Laughing Man demands that the Superintendent-General tell the truth, or he will be assassinated.

The Superintendent-General's press conference quickly descends into chaos after the Laughing Man's assassination threat. Kusanagi suspects that the Laughing Man has inserted a virus into the police units assigned to guard the event. As Section 9 members struggle to evacuate the Superintendent-General to safety, the anti-virus team at HQ races to develop a vaccine to protect against it. However, random civilians begin joining in the assassination attempt as well, without any sort of external influence. After escorting the Superintendent-General to safety and apprehending all of the assassins, the police are left wondering about what caused dozens of completely unrelated people to attempt to murder a single man. After the immediate threat is averted, Aramaki orders Section 9 to open their own investigation into the Laughing Man case

Acting on a tip, Section 9 breaks up a cabal of thieves planning to rob a Japanese financial institution. Shortly after the raid, a Chinese intelligence official contacts Section 9 and informs them of suspicious activity that he believes may indicate an assassination attempt by Chinese Socialists on Kanemoto Yokose, a prominent, yet reclusive, Japanese billionaire. Section 9 is therefore tasked with protecting Yokose, a 56-year-old ex-mathematician who has amassed a fortune by playing the stock market. Section 9 and the assassin arrive within minutes of each other, but after reaching Yokose’s bedroom, both sides discover that Yokose died from a medical condition several months ago, and an advanced computer program had been managing his investments the whole time.

Kurutan calls the Major to the hospital where she works to look into the source of a young girl's heart transplant. The heart she received was given without consent of the owner's parents. The girl's doctors feared she might have had to be given a full-cyborg conversion, a thought that stirs painful memories for Kusanagi. Aramaki, believing that the culprits may be tied to a mass kidnapping ring, orders Section 9 to look into the case for connections between the organs, the company that sold them, and a local refugee camp set up at an abandoned oil refinery. Finally, the culprits are revealed to be a gang of rich medical students. Before arresting them, Kusanagi decides to scare and humiliate the students by posing as a murderous Yakuza enforcer.

Using her net avatar, Kusanagi enters a chat room dedicated to the Laughing Man. Various theories are passed around the chat room as the members view various bits of evidence from the Laughing Man case. While in the chat room, Kusanagi homes in on an older man sitting at the table who seems to have more knowledge about the Laughing Man incidents than anyone else. After confronting the man and exchanging information with him, Kusanagi and one of the other guests are suddenly transferred out of the chat room and she briefly sees the Laughing Man.

Marco Amoretti, a former American Imperial Navy Petty Officer turned serial killer, has arrived in Japan and for the last two months has murdered several women by slicing the skin off their torsos in the form of a T-shirt. American CIA officers have been dispatched to Japan, ostensibly to assist Section 9 in their effort to track down and apprehend Amoretti before he can strike again. When the CIA officers show no surprise at the developments in the case, Ishikawa hacks into the CIA database and learns that Amoretti was part of an American Empire commando team sent into the jungles of South America to conduct a covert operation aimed at breaking an enemy’s will to fight by using terror tactics, such as flaying civilians alive. Elsewhere, Batou — an ex-JGSDF Ranger who has seen first-hand the horrors of the CIA operation — resolves to stop Amoretti by any means necessary.

The Ministry of Health, Labour and Welfare's database has been hacked into, and classified material has been stolen. Section 9 traces the hack and determines that the hack job originated from a facility that helps people with Cyberbrain Closed Shell Syndrome. Togusa goes undercover to investigate the social welfare facility, and immediately encounters suspicious behaviour from the facility's supervisors. Togusa manages to learn that a person called "the Chief" visited the center during the week that the MHLW was hacked, but before he can determine the significance of this information Togusa is discovered; simultaneously, the facility's security system unexpectedly goes online, and Section 9’s databases are subsequently hacked, leading Kusanagi and Batou to make an emergency insertion to evacuate Togusa.

Early in the morning Batou's Tachikoma self-activates and leaves the Tachikoma storage bay to explore the outside world. While roaming the streets of Niihama, the Tachikoma encounters a young girl named Miki who is searching for her lost dog. The Tachikoma decides to help the girl, and together they manage to find the dog. While on their journey, the Tachikoma stumbles upon a cyberbrain being sold in a market that contains a ghost, and brings it back to the storage bay. When the Tachikoma returns to Section 9, technicians begin extensive tests to determine why the tank went AWOL in the first place, while Section 9 members turn their attention to the cyberbrain in an effort to determine what the brain contains. When one of the lab technicians investigating the brain links with it and becomes "lost," Kusanagi volunteers to go after the missing man, leading her find the technician watching a movie that lacks a beginning or ending which brings her to tears.

Sixteen years ago, Eka Tokura, the daughter of a pioneering cybernetics company's CEO, was kidnapped by the New World Brigade, a terrorist group opposed to cyberization. The girl's whereabouts remained a mystery until she was spotted by members of the Maritime Safety Team aboard an abandoned radiation scrubbing station off the coast of Okinawa. Four Special Security Team operators of the Japan Coast Guard were sent to find the girl and rescue her, but the team vanished without a trace. Section 9 is covertly dispatched to the island with two objectives: locate any remaining SST members and evacuate them, and find and rescue the missing girl. Section 9 is inserted by submarine, and after a time manages to find the girl, but when they do, they realize that something is wrong: the girl is the same age she was when she was kidnapped all those years ago.

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