Phantom begins with a car chase in Chicago, which ends with a man plunging into the icy waters of a river. Daniyal Khan (Saif Ali Khan) is convicted for murder and jailed. A flashback of 6 months ago takes us to the office of the Indian R.A.W. chief Roy (Sabyasachi Chakrabarty), where he and his trusted men (Rajesh Tailang, Mohammed Zeeshan Ayyub) plan a daring covert operation. Daniyal, now a dead-end ex-soldier with a completely deadened sense of life and death is pulled out of oblivion and pressed into service by the spy agency to wreak vengeance on the men who planned the 26/11 Mumbai terror attacks. He agrees on the reassurance that he will be reinstated in the Indian army to the same post from which he was removed, which means regaining the respect of his estranged father. His only team member, Nawaz Mistry (Katrina Kaif) helps him find his first target-Sajid Mir (Mir Sarwar) at the British England Cricket Match, and thus on determines his identity after breaking into his house and rigging up an explosion which makes the headlines. Coming back to the present, upon Daaniyal's arrest, he lands in the same jail as David Headley (J.Brandon Hill). Here he contacts Nawaz, in order to acquire 100 dollars so he can buy batteries, which hold a certain poison that kills you almost immediately upon hitting the tongue, which is also an undetectable form of murder, which will come out as a heart attack. After killing David Headley, the man who supposedly died upon falling in the icy river is found alive and Daniyal, who is using the alias of Jude Rosario in jail, is given bail and the police find it slightly suspicious, as if he entered jail with the intention of killing David and coming out. Then, he and Nawaz make a plan of going to Pakistan, where they take down the last 2 perpetrators, Sahabuddin Umvi and Haaris Saeed (Shahnawaaz Pradhan). In Pakistan, they make plans of killing Haaris Saeed with the help of local restaurant owner Khalid (Midat Sahab) by an explosive planted in the mic during his speech. Its here the famous number Afghan Jalebi is shot. Though, when this plan fails, Daniyal pursues him in the car and shoots him in the head, causing an explosion. Now, with the Pakistani army and I.S.I pursuing them, they try and escape. Yet, there accomplices get shot. Now, they take a boat to escape through water, but the Pakistani military find out and send patrol boats to apprehend all water vehicles and search them for Nawaz and Daniyal. They both hide in the water but the Pakistani Military suspect that they are hiding in the water and shoot at it. Daniyal gets shot while shielding Nawaz from their bullets and eventually succumbs to his injuries in Pakistani waters, leaving a heartbroken Nawaz to be rescued by the Indian Navy. She is dropped by the Indian Navy to the Taj and she has 2 cups of tea, one for herself and one for Daniyal, fulfilling a promise made to him.