The beginning of Gladiator contains a cutscene showing a brutal sport in which contestants try to kill each other. Called Dreadzone, it is a very large part of the story. After saving the galaxy once again, Ratchet and Clank are given the job of running the Starship Phoenix, with Al for back-up if need be. When Sasha, the new mayor of Metropolis, phones in and informs the crew of the death of Captain Starshield and the fact that many heroes are being abducted, robots approach the Phoenix and overrun it, taking Ratchet, Clank, and Al captive.
They are transported to the Shadow Sector, a lawless region on the fringe of the Solana Galaxy. Here, Ratchet meets Gleeman Vox, the president/creator of Dreadzone which is shown on Vox Entertainment (a massive media empire within the Shadow Sector and parody of Fox Entertainment), who reveals that Ratchet is now being forced to compete in the reality holovision show, DreadZone. Ratchet is now wearing a "DeadLock" collar that will shock him if he strays into restricted areas or detonate if he becomes uncooperative or boring.
Collectively referred to as "Team DarkStar", Al serves as the mechanic for Ratchet's combat bots, Merc and Green, while Clank serves as his "Mission Control", similar to an Operator from the matrix film series. Ratchet and the combat bots compete across a series of Battlecourses, and a series of tournaments in the BattleDome at DreadZone Station, clearing challenge after challenge, while Ratchet, already framed of many disturbing attributes, becomes one of the most infamous contestants in DreadZone history. However, Ratchet enjoys great popularity with the viewers.
Ratchet's most notable victories are against the DreadZone Exterminators, a group of contestants who no longer compete normally, but serve as bosses during the tournaments and kill competing heroes. He defeats ShellShock on Planet Kronos, then Reactor, The Eviscerator, and Ace Hardlight (the Captain of the Exterminators) in separate BattleDome tournaments earning higher ranks: Marauder, Avenger, Crusader, Vindicator, and Liberator.
Following his defeat by Ratchet, Ace, as he lays dying in the BattleDome, says to Ratchet, "Don't...let Vox do to you...what he did to me." Ratchet is then taken to see Vox. He claims to have been trying to make Ratchet a star; an ironic claim, because Vox's reporters Dallas and Juanita have been slandering Ratchet most of the time. Vox tells Ratchet that it was just "building up his bad boy image", and he offers to make Ratchet the new Captain of the Exterminators, and Ratchet (who is disgusted by the idea of making a living by killing other heroes) refuses, saying, "You actually think I'd kill other heroes to get rich? You're not just corrupt, you're stupid."
Stating that Ratchet has signed his own death warrant, Vox has him escorted from the room, and requests that they be sent to the "Gauntlet of Doom" located at the Ghost Station battlecourse, despite protests from the testbot whom he gave the order to that "...it was mathematically proven to be. ..unbeatable." This was justified to DreadZone fans via anews report that Ratchet was using banned drugs, showing his head on a muscular body.
After Ratchet successfully runs the Gauntlet of Doom and demolishes the Ghost Station, he returns to his DreadZone containment area, and Clank tells him that he has found a way to shut down the containment fields holding the heroes hostage. Al makes his return as a cyborg (he had previously been shot by Ace Hardlight after the third tournament, when he succeeded in deactivating Clank's DeadLock collar), and tells Ratchet what he needs to do; take a reprogrammed shuttle to the BattleDome's control level and destroy the central computer, but, as Clank puts it, "it is a one-way ride".
After his arrival at the control level, Ratchet finds out that Vox was luring Ratchet into yet another trap. Stating boldly that the BattleDome is wired with "six gigatons of nitroglycerin", Vox says that Ratchet will be responsible for the death of everyone there if he fails. After Vox announces this atrocity, Ratchet's 'bad boy image' is completely erased, and Ratchet is assured that, as Juanita says, "We're rooting for you, little buddy."
Running a massive gauntlet of enemies and destroying each of three power generators, Ratchet manages to deactivate the containment fields and simultaneously unlocks DreadZone Station's escape shuttles(At this time, Dallas has a nervous breakdown, explaining to some people he knew about how he set their bags on fire and put a tyrannoid in one of their bags.Jaunita tells him" There, there, Its ok Dallas, Mommy's here for you". At which point dallas tells her the mommy baby thing was very sexy and that "BABY NEEDS A CHANGIN' ) Ratchet's final battle with Gleeman Vox follows, which as Vox says, "It's a little one-act play I call 'Death of a Lombax'", first against Vox in a hoverpod represents a Dreadzone Laser Back, then against a giant mech which Vox docks his hoverpod into, giving him more powers.
After his defeat, Vox reactivates the self-destruct sequence via remote control, stating to Ratchet that "The escape shuttles all left long ago. Now we'll die together, on live holovision. It'll be the best ratings I've ever had!"
However, Ratchet is spared a horrible death when the last shuttle (piloted by Al) swoops in to rescue him. He grabs Vox's pet, Slugga, and leaps aboard with Merc and Green, where Clank wastes no time removing his DeadLock collar, which he then tosses out the airlock. The collar explodes, followed shortly by DreadZone Station itself. Other gladiators including Kid Nova, Hydro Girl, Agent Zero(he was never seen but mentioned on the Rank-o-Meter) and many others escaped and call to thank Ratchet for saving them.
After the end credits, Dr. Nefarious and Lawrence (from the previous game) make a cameo appearance still stuck on an asteroid with Dr. Nefarious complaining that they were coming within range of a space station (DreadZone Station), which, as Lawrence questioned, suddenly exploded. Nefarious then breaks out into a raging fit, shortly followed by a soap opera audio