In Seattle, teenagers Katie Embry and Becca Kotler discuss the legend of a cursed videotape; whoever watches it dies seven days later. Katie claims she watched the tape with three friends a week ago. Minutes later, Katie is killed by an unseen force, and Becca is institutionalized after witnessing it.
At Katie’s funeral, her mother, Ruth, urges her sister Rachel Keller, a journalist, to investigate her daughter’s death. Rachel lives with her young son Aidan, who possesses a degree of mediumship. Rachel learns Katie’s friends all died on the same night, sporting disfigured appearances. Rachel travels to Shelter Mountain Inn where Katie stayed, discovering the rumoured cursed videotape. Renting the same cabin as Katie, Rachel watches the tape, which contains disturbing, gruesome imagery. Once the tape ends, Rachel receives a phone call from an unknown caller who whispers “seven days”.
Rachel recruits Noah Clay, her ex-boyfriend and Aidan’s father, to study the tape, making a copy after he watches the original. Rachel begins to suffer supernatural symptoms as the week passes, haunted by a young girl with soaking wet hair. Investigation into the tape’s imagery leads Rachel to Anna Morgan, a horse breeder from Moesko Island, who committed suicide after her prize-winning horses drowned themselves. Rachel catches Aidan watching the tape, and discovers Noah is suffering similar symptoms.
Leaving Aidan in Ruth’s care, Rachel travels to Moesko Island to speak to Anna’s widower Richard. On the ferry journey, a horse is spooked by Rachel’s presence, leaping to its death. Noah goes to Eola Psychiatric Hospital to view Anna’s medical files. Both separately discover Anna had an adopted daughter, Samara, who possessed an ability to psychically etch mental images onto surfaces and into minds, driving her parents mad. Rachel tries to speak with Richard about Samara, but he denies her existence.
Rachel speaks with Dr. Grasnik, the island’s general practitioner, who explains Samara was adopted due to Anna’s infertility, recommending them to admit her to Eola, assuming Samara is still there. Rachel sneaks into the Morgan farmhouse, watching a videotape of Samara in a psychotherapy session, who claims she has no control over her abilities. Rachel confronts Richard, who electrocutes himself in a bathtub with a horse bridle upon learning Samara’s powers are still at large. Noah arrives, he and Rachel go to the barn, where Samara was isolated in the loft. They find a burnt image of a tree, Rachel recognizing it from Shelter Mountain.
They return to the cabin, locating a stone well hidden under the floorboards; the final image on the tape. Rachel falls in the well, experiencing a vision of Anna suffocating Samara and throwing her down the well, sealing her in, where she drowned seven days later. Samara’s corpse surfaces after Noah tells Rachel that the seven-day deadline has passed.
The next day, Rachel reassures Aidan that the curse has been lifted by liberating Samara. In a twist, a distressed Aidan tells Rachel that it was a mistake to help Samara, revealing he is still cursed. In his apartment, Noah encounters the vengeful ghost of Samara emerging from his television, murdering him. Rachel, upon finding his disfigured corpse, returns home and destroys the original tape in a furious rage, asking why Noah was killed but she was not. She realizes that the difference is that she made a copy of the tape, which Aidan watched, thereby continuing the cycle that Samara wants to spread of duplicating the video and showing it to someone else to save oneself.
Rachel shows Aidan how to make his own copy. He remarks that the curse will never stop and asks what will happen to the person who watches the new tape, to which Rachel does not answer.