The story takes place twenty five years after the original Knight Rider series. Mike Traceur (who later changes his name to Michael Knight), son of the original Michael Knight, has become the driver of the next generation KITT (Knight Industries Three Thousand), now a Ford Shelby GT500KR Mustang. Along with a former fiancée Sarah Graiman, the daughter of the scientist Charles Graiman who designed both KITTs, Mike becomes the new champion of Knight Industries, a high tech government and law enforcement contractor.

In the episode "Day Turns Into Knight", Dr. Graiman dies due to an apparent explosion on a damaged aircraft, and Agent Rivai is seriously injured and forced to resign as the team's FBI agent. Afterwards, during the episode "Knight to King's Pawn", the NSA shuts down the KITT Project due to Dr. Graiman's death, and Agent Torres deactivates KITT in order to reactivate KARR. Torres believed that KITT's programming would be able to override KARR's inherent self-preservation protocols to save human lives instead of harming them. In holographic messages to Mike and Sarah, Dr. Graiman reveals this had always been Agent Torres's plan for KITT and that he had opposed him. Mike is told that he was KARR's original driver and that his mind was wiped in the wake of the project's failure. The team find KITT's AI stored online and attempt to rebuild it. Mike then infiltrates Area 51 to install the new KITT AI chip into his confiscated Mustang shell.

As Mike and KITT flee, KARR discovers that KITT has been reactivated and overcomes KITT's protocols, taking Torres as a hostage/driver. KITT is able to destroy KARR but Agent Torres dies shortly thereafter. Sarah discovers that her father had left all of the Knight Industries' funding in her name. Sarah, Mike, Zoe, and Billy use that funding to restart the Foundation for Law and Government (FLAG) and continue on its original mission.