In a dystopian future, the polar ice caps have melted and New Orleans is buried underwater. On the Gulf Coast nearby, as humanity has reverted to survival mode, a small economy has grown from the scavenging of washed up oil tankers. Nailer is the fifteen year old son of violent father and one of these scavengers. He rescues Nita, the stranded daughter of a wealthy merchant, and decides to help her try to contact her father's people. Unfortunately, this infuriates several parties, including Nailer's father, the local power brokers, and Nita's father's enemies.
In a dystopian future, Nailer is a scavenger who strips copper wiring from ancient shipwrecked oil tankers, giving over his findings to his crew boss, simply so he can survive.
When he and his friend Pima discover the wreck of a luxurious yacht after the passing of a hurricane they hope that somehow they can turn their find into a bit of luck that will make their futures safe and secure. While searching the ship for salvagable supplies, they also find a girl, Nita, on the ship, barely alive. Nailer and Pima work together to save Nita, where they learn that she is the niece of the CEO of a massive trading clan. Nailer's father Richard Lopez eventually discovers this, and captures them with the intent of selling Nita to some of her father's corporate enemies.
After escaping his father, Nailer and Nita, along with the half-man Tool (a genetic creation from human, dog, and hyena DNA), head to the city of Orleans II with the hope of finding one of Nita's uncle's captains present. There, the trio find work as dock workers while awaiting the arrival of a trustworthy captain, doing tasks such as message-running, supply-finding, and other "spare" tasks. After several weeks in Orleans II, Nailer sees his father's head in the crowd, along with several half-men with him. Nailer flees, and tells Nita that his father was there, with an obvious intent of killing Nailer and selling off Nita to free himself from the poverty-ridden life he was used to.
Nita informs Nailer that one of her uncle's ships, the Dauntless had docked recently, and that they could escape. Nailer advises against this, as the Dauntless had arrived the same day that Nailer's father had, and that it could be a trap. While fleeing from Richard, Tool becomes engaged in a fight with the two half-men that accompanied him. A brief fight ensued, where Nailer and Nita hesitantly agree to move on, and leave Tool to his fate. After a brief fight, Tool is knocked into a building, which collapses on him, and Nailer and Nita believe him to be dead. The duo then escape to an abandoned building, when Nailer, against Nita's wishes, goes to examine the Dauntless, while Nita remains in the building. Nailer recognizes the ship's captain on the wharf, and reveals himself. After explaining his situation to the captain, he shoots his lieutenant in the back, killing him. The captain explains to Nailer that he was loyal to Nita's uncle's corporate rival since Nita's disappearance, but so long as she is alive, they are loyal to her.
They travel to Orleans II and gather up the crew of the Dauntless, but upon returning to Nita's hiding place, all they find is a wounded Tool in the corner, who tells them that Richard Lopez (Nailer's father) has lead the crew of the Ray right to Nita. They catch up to the Ray and end up finding out it was a trap set by The Pole Star, and end up being chased by the ship all the way to Bright Sands Beach. Nailer uses his familiarity with the terrain to advise the captain, he directs the boat to a shallow area known as "The Teeth", for the underwater hazards contained therein. Nailer is able to safely direct the Dauntless through the hazard, but the Pole Star is wrecked on the underwater rocks.
The Dauntless crew then boards the Pole Star where a fight ensues, and nearly all of the opposing crew are killed, including Richard Lopez. After the battle, Nita invites Nailer to travel with her, and they leave Bright Sands Beach for good.
- Richard Lopez: Nailer's evil father and leader of a scavenge band.
- Pima: Nailer's best friend. She is also a scavenger.
- Sadna: Pima's mother. A veteran scavenger who works on the "heavy crew".
- Nita: The sole survivor of a shipwreck and the daughter of a global shipping family.
- Captain C sharp, benevolent wheeler-dealer with hands in everything from antibiotics to crystal slide.
- Mr. Marn: The captain of the Ray, an enemy ship.
- Trimble: A half-man who works for Captain Candless.
- Blue Eyes: Member of Richard Lopez's crew, a hard stringy woman devoted to the Life Cult.
- Patel: The family name of a wealthy business mogul who profits from ship breakers. Lucky Girl claims to be related to them.
- Nathaniel Pyce: Nita's treacherous "business-marriage uncle," whose people are pursuing her to gain control of the family business empire.
Ship Breaker takes place on the Gulf Coast in a dystopian future, in the general vicinity of present-day New Orleans.
- Bright Sands Beach: The beach that Nailer, Pina and the rest of their crew and families call home. "A tarred expanse of sand and puddled seawater, littered with the savaged bodies of other oil tankers and freighters."
- The "Teeth". A dangerous section of water close to shore, containing sharp rocks that are invisible at high tide.
- Orleans II: The largest city in the area, some distance away from the original "drowned city" of New Orleans. Orleans II is itself partially submerged and abandoned, but retains a functioning port and associated merchant community.
- The Mississippi Metropolitan ("MissMet"). A large city built near to Orleans II, but further inland. The city is only mentioned in the book, although it is described as a large and still-functional metropolis.
- Lawson & Carlson: Nailer's employer at the beginning of the novel. From the book, we know that it is a multinational corporation that makes a profit selling the scavenge Nailer and his colleagues collect.
- Libeskind, Brown and Mohanraj: Makers of clippers and other sailing vessels
- Boston Freight: A shipping firm
- Patel Global Transit: A shipping conglomerate, owned by Nita's relatives.
- Dauntless: A clipper ship known by Nita to be loyal to her father. The ship that Nailer sails on in his quest to find Lucky Girl.
- Pole Star: A cross-global schooner that serves both as a trading vessel and as a warship. Loyal to Pyle, this ship pursued Nita's clipper into the "city killer".