Crysis Warhead takes place during the events of the original Crysis in 2020, when an ancient alien spacecraft is uncovered on the fictional Lingshan Islands, east of the Philippines. The player controls former British SAS Sergeant Michael "Psycho" Sykes, a member of the Raptor Team, a squad of mostly American soldiers outfitted with advanced technology. Warhead takes place on the other side of the island in which Crysis is set and begins after Psycho, a supporting character in Crysis, splits up with Nomad following their raid on the North Korean harbour. Psycho witnesses a North Korean warship being bombarded by U.S. Navy fighter jets. Leaving the shore, he joins a vehicle convoy driving through the jungle, and defends it as it is attacked by North Korean soldiers. The convoy is destroyed and the Marines fight into the night. The VTOL that tries to evacuate the destroyed convoy's Marines is hit by a missile and crash-lands. Psycho awakes and goes to find a better position for the surviving Marines, but gets attacked by an EMP blast from a container being lifted away by a North Korean helicopter. Psycho is later assigned a mission to pursue another North Korean container that JSOC believes contains a nuclear warhead. As the mission progresses, Psycho is reunited with friend Sean O'Neill who was originally going to have Nomad's spot on Raptor Team. He was replaced by Nomad after failing an evaluation test. Psycho helps O'Neill after his F-35C jet is shot down and takes him to a VTOL to escape.
Psycho fights through the jungle and coastlines against the North Korean military to track down the container and stop them from taking it. After he reaches a cargo submarine, he sees what's inside. Rather than a nuclear warhead, the container houses an alien war machine, which knocks Psycho out with an EMP blast. After he wakes up again, he is captured and tortured by the North Koreans. As the submarine submerges, the island is suddenly flash-frozen while mechanical alien "Exosuits" attack. Psycho pursues Colonel Lee Kim Sun through the frozen waters and valleys, eventually meeting up with another nanosuit team on the island, Eagle Team. Psycho and Eagle Team continue the pursuit, fighting off an enormous walking Exosuit. Eagle Team is separated from Psycho in a mine, while Psycho continues searching for the container. After reaching an underground train station, Psycho is ordered to get on the train the container is loaded on. Emerging above ground, Psycho fights off both North Korean soldiers and aliens trying to reclaim the container, while O'Neill assists him.
Psycho is ordered to destroy the container if he cannot capture it, and the train is stopped on a bridge which is rigged with explosives in case he needs to do so. Before the container can be extracted by friendly forces, Colonel Lee arrives and uses a captured U.S. marine as a hostage to bait Psycho off the train, and Psycho loses the detonator while saving him. The marine pleads with Psycho to drop him so Psycho can retrieve the detonator and destroy the container. Colonel Lee manages to escape with the container before the explosives can be detonated. Although Psycho survives the fall, the marine, who was not wearing an armoured nanosuit, is not so lucky. He takes out his rage on an injured North Korean nanosuit soldier he pulled off the bridge with him, and drowns him in the river. Struck with grief for not saving the life of the Marine, Psycho has an emotional breakdown, but regains his composure in order to finish his mission.
Psycho assaults the North Korean-occupied airfield where the container is waiting to be taken off the island, taking out numerous ground forces and North Korean tanks. O'Neill returns in a VTOL, and assists Psycho in destroying an upgraded Exosuit walker by guiding him to a crashed U.S. Air Force cargo plane, which transported a powerful experimental weapon, the PAX (Plasma Accumulator Cannon), which allows him to fight off the initial wave of attackers. As the two are about to start extracting the container, Colonel Lee shows up again to reclaim the container, holding O'Neill at gunpoint. Lee tries to shoot O'Neill, but O'Neill is shielded by a cloaked Psycho, who begins fighting with Lee as O'Neill retakes control of the VTOL and takes the container. Psycho and Lee begin fighting inside of the VTOL, and Psycho gains the upper hand, knocking Lee out of the back onto the tarmac, leaving him to the mercy of a massive alien warship. O'Neill takes off with the container, as Psycho relaxes in the back
Psycho fights through the jungle and coastlines against the North Korean military to track down the container and stop them from taking it. After he reaches a cargo submarine, he sees what's inside. Rather than a nuclear warhead, the container houses an alien war machine, which knocks Psycho out with an EMP blast. After he wakes up again, he is captured and tortured by the North Koreans. As the submarine submerges, the island is suddenly flash-frozen while mechanical alien "Exosuits" attack. Psycho pursues Colonel Lee Kim Sun through the frozen waters and valleys, eventually meeting up with another nanosuit team on the island, Eagle Team. Psycho and Eagle Team continue the pursuit, fighting off an enormous walking Exosuit. Eagle Team is separated from Psycho in a mine, while Psycho continues searching for the container. After reaching an underground train station, Psycho is ordered to get on the train the container is loaded on. Emerging above ground, Psycho fights off both North Korean soldiers and aliens trying to reclaim the container, while O'Neill assists him.
Psycho is ordered to destroy the container if he cannot capture it, and the train is stopped on a bridge which is rigged with explosives in case he needs to do so. Before the container can be extracted by friendly forces, Colonel Lee arrives and uses a captured U.S. marine as a hostage to bait Psycho off the train, and Psycho loses the detonator while saving him. The marine pleads with Psycho to drop him so Psycho can retrieve the detonator and destroy the container. Colonel Lee manages to escape with the container before the explosives can be detonated. Although Psycho survives the fall, the marine, who was not wearing an armoured nanosuit, is not so lucky. He takes out his rage on an injured North Korean nanosuit soldier he pulled off the bridge with him, and drowns him in the river. Struck with grief for not saving the life of the Marine, Psycho has an emotional breakdown, but regains his composure in order to finish his mission.
Psycho assaults the North Korean-occupied airfield where the container is waiting to be taken off the island, taking out numerous ground forces and North Korean tanks. O'Neill returns in a VTOL, and assists Psycho in destroying an upgraded Exosuit walker by guiding him to a crashed U.S. Air Force cargo plane, which transported a powerful experimental weapon, the PAX (Plasma Accumulator Cannon), which allows him to fight off the initial wave of attackers. As the two are about to start extracting the container, Colonel Lee shows up again to reclaim the container, holding O'Neill at gunpoint. Lee tries to shoot O'Neill, but O'Neill is shielded by a cloaked Psycho, who begins fighting with Lee as O'Neill retakes control of the VTOL and takes the container. Psycho and Lee begin fighting inside of the VTOL, and Psycho gains the upper hand, knocking Lee out of the back onto the tarmac, leaving him to the mercy of a massive alien warship. O'Neill takes off with the container, as Psycho relaxes in the back