Angel Beats! takes place at a high school acting as a Purgatory, where students learn to give up any lingering attachments they still have from life before continuing to an afterlife or reincarnation. While the injury or cause of death are gone, those in the afterlife school can still feel pain or other things as they did when they were alive, as well as dying again, only to awaken with no injures several minutes later. The story follows the main protagonist Otonashi, a boy who lost his memories of his life after dying. Upon awakening in the afterlife, he meets a girl named Yuri who invites him to join the Shinda Sekai Sensen (SSS) (死んだ世界戦線 , lit. Afterlife War Front), an organization she founded and leads which fights against God for the cruel fates the SSS members experienced in life. Their only enemy in the world is the school's student council president Angel, a being with supernatural powers who fights against the SSS. Yuri believes that anyone who follows Angel's orders and behaves like a normal student at the school will eventually disappear and pass on. However, those who fulfill their dreams in the afterlife will pass on as well.
In the SSS, there are two sub-divisions which help in the SSS's operations against Angel. The first is a four-girl band named Girls Dead Monster whose objective in the SSS is to cause a diversion from other activities the SSS is engaged in, while on the surface appearing to be a normal all female band. This includes distracting Angel and a large number of "normal" students and teachers at the school Yuri deems "non-player characters" as they are not human, but look and act the part. Another organization in the SSS is the Guild, located far below the surface of the afterlife world, which serves to supply the weapons the SSS uses against Angel. Anyone in the afterlife is able to create anything out of dirt that they had memories of in life, and the Guild uses this ability to mass produce weapons.
Angel uses a similar ability to create her supernatural powers known as "guard skills", with the aid of a computer program called Angel Player. The primary one that she uses is called "hand sonic", a blade on one or both forearms that is capable of changing into five different forms. Other skills include but are not limited to: "distortion", an invisible barrier that deflects bullets or other projectiles away; "delay", which creates an after-image to disorientate an enemy in close range; and "harmonics", where a clone with a consciousness of its own is formed from the original. These abilities are activated by voicing their name; however, others like "overdrive", which gives her great physical strength, are passive and are always on.
The Guild is purposefully destroyed after Angel infiltrates the compound, but the Guild members relocate to the old Guild location, which Angel does not know about. As Otonashi begins to get used to life in the afterlife, the leader of Girls Dead Monster, Iwasawa, disappears in front of a crowd of people after a solo musical performance. The SSS find out Angel's real name is Kanade Tachibana, and after a successful operation, Kanade loses her position as student council president and the vice president Naoi succeeds her. Unlike Kanade, Naoi cracks down on the SSS and even uses powers of hypnosis to control NPCs to fight for him. Otonashi is able to stop him after acknowledging Naoi's existence and Naoi subsequently joins the SSS. Otonashi regains his memories with the aid of Naoi's hypnosis and agrees to continue with the SSS.
With Kanade a normal student now, Otonashi befriends her and invites her to join in on SSS activities. Kanade uses one of her powers to clone herself while engaged in combat, resulting in a violent red-eyed Angel. The clone replicates itself many times, but the clones are later absorbed back into Kanade after Yuri rewrites the Angel Player program. Kanade manages to overcome the personalities of the violent clones after awakening from the ordeal. Otonashi starts cooperating with Kanade to help the other SSS members move on after he fully remembers the details of his life and death. Kanade is reinstated as student council president in accordance with their plan. Otonashi and Kanade cooperate to allow Yui to pass on by fulfilling her wishes, but it is Hinata in the end who fulfills her final wish to get married that allows her to pass on.
Mysterious shadow monsters appear and begin attacking the SSS. Takamatsu gets devoured by one, only to reappear as an NPC. Otonashi reasons with the other SSS members and many of them agree to pass on in lieu of becoming an NPC, including the rest of Girls Dead Monster, Chā, and several unnamed members. Yuri notices that the NPCs are turning into the shadows, and her investigation into who is behind this leads her back into the Guild. After receiving help from Otonashi, Kanade, Hinata and Naoi, Yuri meets a boy who tells her he was programmed to activate the shadow program when love was detected in the world. The programmer himself turned into an NPC long before. Yuri destroys the computers responsible for the shadow program. Three days after the incident, Otonashi, Yuri, Kanade, Hinata and Naoi are the only ones yet to pass on. They hold a graduation ceremony where they thank each other for their support. After Naoi, Yuri and Hinata pass on, Otonashi learns that Kanade's regret was not being able to thank him for the heart she received from Otonashi after his death. Otonashi is heartbroken after she thanks him and passes on, as he has fallen in love with her, but he too passes on shortly after. In an epilogue, Otonashi and Kanade meet again in the real world.