The plot, which takes place in an alternate storyline between the events of Tekken 5 and Tekken 6, begins with Anna Williams setting up a decoy for her sister, Nina Williams, who is currently working with the new head of the Mishima Zaibatsu, Jin Kazama. Anna, on the other hand, works for Jin's father, Kazuya Mishima and its rival organization, G Corporation. Both are seeking information about a student named Shin Kamiya, and Anna dispatches a Chinese student, Ling Xiaoyu to act as a spy, while Jin sends humanoid robot Alisa Bosconovitch for a similar purpose.
During their investigation, Xiaoyu and Alisa form a friendship, unaware that the other is working for their enemy, although they are forced to turn against one another when Shin is captured by an unknown assailant. It is here that Alisa is revealed to be a cyborg - although Alisa believes she possesses human qualities after she spares Xiaoyu's life. After coming to terms with each other, Xiaoyu is abandoned by Anna and G Corporation, and the two girls flee from their previous organizations, taking refuge in their teacher, Lee Chaolan's mansion.
Xiaoyu and Alisa eventually discover genetic experiments had been done on Shin and his classmates, and believe that the Mishima family is seeking Shin, the sole survivor, and M gene subject, for his immortality. The pair discover that this had in fact, been an elaborate plan engineered by Heihachi Mishima, who used Shin to lure Kazuya and Jin and get the Devil Gene. After Heihachi disposes of Shin, he, Kazuya and Jin engaged in a triple threat brawl. During the fight, Kazuya and Jin become their devil forms. Ultimately, Jin is the victor, utilizing his devil powers. Heihachi then unleashes the ancient spirits of the Mokujins and a final fist burst by Alisa leaves Mokujin Heihachi open. Jin finishes him off, by an eye blast which slices it in half. Jin then leaves, telling Xiaoyu that he awaits a future challenge.
The film ends with Alisa and Xiaoyu back at their school's festival with the pair planning to enter the next King of Iron Fist Tournament.
The film was initially announced at Namco's "LevelUp" event in Dubai on May 5, 2011. A trailer premiered at the event and also was posted online shortly after. The film, inspired by the popular video game series is being supervised by Youchi Mori (Appleseed), with the screenplay written by Dai Satō (Cowboy Bebop) and animation production by Digital Frontier, who produced the FMV sequences for Tekken 5 and Tekken 6: Bloodline Rebellion. The release arrived in late summer, also with availability in 3D. In a group interview at the LevelUp event in Dubai, attended by Christian Donlan for Eurogamer, Tekken project leader Katsuhiro Harada revealed Blood Vengeance has actually been in development since January 2010.
Harada has been very clear that this movie is not related to the live-action film and is doing whatever he can to ensure this project is distanced as much as possible from that film. "That doesn't have anything to do with it this time," Harada insisted. "We're not trying to rewrite those wrongs. Fans are always asking us for a 3D movie. This is our response to them... We want to make a movie that everyone can enjoy, though. Not just Tekken fans." Namco's Tekken team has wanted to do A 3D movie after the creation of the CG opening for Tekken 6's scenario campaign.
Namco has "tried as much as possible" to use the same voice actors from the games for the film. Writer Dai Satō, who had previously worked on Cowboy Bebop, is a fan of the Tekken series, and was given "quite a bit of creative freedom".
On July 23, 2011, Namco Bandai previewed Tekken: Blood Vengeance at Comic-Con with writer Satō, and voice actresses Carrie Keranen and Cristina Vee as guests.
The film was released in both Blu-ray and DVD formats on November 22, 2011 in North America, and December 1, 2011 in Japan. The Blu-ray version was also released as a Hybrid Disc, known as Tekken Hybrid. Whilst the film can be played on any Blu-ray player, running the disc on a PlayStation 3 console will allow owners to also play an HD version of the original Tekken Tag Tournament, which was originally released in the arcades in 1999 and for PlayStation 2 in 2000, as well as a demo version of Tekken Tag Tournament 2. A 3D version of the movie was made available in Tekken 3D: Prime Edition for the Nintendo 3DS. It is the first film to be released for the 3DS.
Tekken: Blood Vengeance has received mixed reviews with many comparing it to Tekken: The Motion Picture and the 2010 live-action film. IGN's Steven Hooper stated that "The film's story isn't great -- as you might expect, and there are some really dull periods and pacing issues. It is a lot better than the dismal live-action Tekken film from 2010, and boasts some pretty cool fight scenes.", and added that film actually benefits from 3D. Cheat Code Central's Angelo M. D'Argenio commented "as fan service flicks go, it's not that bad. The fight scenes are pretty awesome and the characters use all the moves they have access to in the games. The voice acting, though, is not so great. Nevertheless, it's fun to watch your favorite Tekken characters beat the crap out of each other, no matter how vague and pointless the reasons behind it. Besides, this movie is way better than any other Tekken movie that has come out to date, anime or live-action, so at least it has that going for it." PALGN's Bev Chen said "It’s actually not a bad film, especially when you compare it to the dismal live-action Tekken film that was released last year – the story adds a fair bit to the game’s mythos and the fight scenes are pretty cool to watch too." Matt Edwards of Eurogamer said "At around 92 minutes long, it's a fairly inoffensive romp that shows off some impressive effects and crazy fight scenes with a surprisingly limited selection of Tekken characters. Although it's a slight improvement over the recent live-action and less recent anime adaptations, it's still a long way off the excellence of Street Fighter II: The Animated Movie". Joystiq's Eric Kaoili called it "a pleasant enough film, much better than the travesty that was Tekken: The Motion Picture".
The Japanese Committee of the International 3D Society honored Tekken: Blood Vengeance along with Always Sanchōme no Yūhi '64, Kaibutsu-kun and Sadako 3D at the second annual International 3D Awards Lumiere Japan, where all four films won the Movie Award. The film also won the International Jury Prize (Japan) at the International 3D Society's fourth annual 3D Creative Arts Awards.