Against the background of space - a crippled Earth ship. Astronauts Skipper and Alvin work to repair their ship as an alien ship appears, and a helmeted creature tells them their time has expired! And... cut! Director Sol X. Zimenes congratulates his actors on a 'classic scene' but Buzz Peters, playing the alien 'Terror of the Spaceways', is less than enthusiastic and storms off. Meanwhile, forty miles away outside Los Angeles, a SHADO Mobile closes in on a landing UFO. Both craft are destroyed in an exchange of fire - Operative Hanson is killed, and the Alien pilot is thrown clear, to find a car approaching. The driver thinks this strange figure a publicity stunt, but the Alien steals the car to find a place to hide, and a means to contact base. While Paul Foster heads for the last known position of the Mobile, the Alien passes film studios - and sees a massive spaceship! Crashing through the barrier, the Alien silently bluffs his way to the set, as studio police and crew think him part of a science-fiction film. Foster finds the brutally beaten driver, who dies after telling him about the Alien, and starts to search. The Alien has been found by Buzz Peters, and is killed for his troubles. Before the Alien can get away, he is found by Zimenes, who thinks he is the actor in costume, and is led to the 'spaceship'. Foster arrives as the Alien triumphantly boards it, only to find it is a giant prop! As Zimenes' cameras roll, the angry Alien opens fire, and dies when the 'ship' burns to the ground. With no answers to offer, Foster leaves a baffled Zimenes to put out the blaze.
On the planet of the Aliens, an experiment is about to begin which could give the Earth's arch-enemies the power to destroy SHADO... An Alien in a space-suit is bombarded with weapons - and survives unscathed. Some days later, three UFOs approach but one avoids the Interceptor attack. It lands close to SHADO Headquarters, and Mobiles are despatched to capture the Alien. The operatives are somewhat astonished as the armed Alien stands by the UFO, almost taunting them in. One opens fire, and the Alien proves indestructible! A pitched battle starts, ending in the destruction of the Mobiles, and the Alien advancing on the Studios. But is he after the base, or just Straker? The Commander decides there is only one way to find out, and confronts the enemy...
A UFO descends over the Rocky Mountains in North America, and Sky One closes in for the kill. But Foster and a squad of Mobiles are closing on the area too, and with the opportunity to capture an Alien alive, the order is given to let it land. Settling beside a cliff, the UFO is hemmed in but when an operative sees a hatch open and moves forward to investigate, it self-destructs. Foster does not believe the Alien would allow himself to be destroyed so easily, and sure enough they find a old mine-working entrance behind the wreckage. Foster goes in alone, and finds an Alien device.
The "Operation Babylon" of the title is the aliens' plot to turn the speech of the SHADO operatives into gibberish so they cannot communicate with each other and coordinate a defense against a UFO invasion. The title is derived from the Biblical story of the Tower of Babel in Babylon, where God is said to have caused humanity to use different languages in different parts of the world, instead of the single language once said to have been spoken by all, so that it became difficult for all to be understood.