Sally Hardesty, her paraplegic brother Franklin, and their friends, Jerry, Kirk, and Pam visit the grave of the Hardestys’ grandfather to investigate reports of vandalism and grave robbing. Afterwards, they decide to visit the old Hardesty family homestead. Along the way, they pick up a hitchhiker, who talks about his family who worked at the old slaughterhouse. He borrows Franklin’s pocket knife and cuts himself, then takes a single Polaroid picture of Franklin, for which he demands money. When they refuse to pay, he burns the photo, and slashes Franklin’s left arm with a straight razor. The group forces him out of the van and drive on. They stop at a gas station to refill their vehicle, but the proprietor tells them that the pumps are empty.
They continue toward the homestead, intending to return to the gas station once it has received a fuel delivery. When they arrive, Franklin tells Kirk and Pam about a local swimming-hole, and the couple go to find it. They stumble upon a nearby house, and Kirk calls out for gas, entering through the unlocked door, while Pam waits outside. Leatherface, a large mute man wearing a mask made from human skin, suddenly appears and kills Kirk with a hammer. Pam enters soon after, and trips into a room filled with furniture made from human bones. She attempts to flee, but Leatherface catches her, and impales her on a meathook, making her watch as he butchers Kirk with a chainsaw. Jerry heads out to look for Pam and Kirk at sunset. He sees the house and finds Pam, still alive, inside a freezer. Before he can react, Leatherface kills him.
With darkness falling, Sally and Franklin set out to find their friends. As they near the neighboring house and call out, Leatherface lunges from the darkness and kills Franklin with a chainsaw. Sally runs toward the house, and finds the desiccated remains of an elderly couple upstairs. She escapes from Leatherface by jumping through a second-floor window, and flees to the gas station. The proprietor calms her with offers of help, but then ties her up, gags her, and forces her into his truck. He drives to the house, arriving at the same time as the hitchhiker, now revealed as Leatherface’s brother. The hitchhiker recognizes Sally, and taunts her.
The men torment the bound and gagged Sally while Leatherface, now dressed as a woman, serves dinner. Leatherface and the hitchhiker bring down one of the desiccated bodies from upstairs, that of their Grandpa. He is revealed to be alive when he sucks blood from a cut on Sally’s finger. They decide that Grandpa, the best killer in the old slaughterhouse, should kill Sally. He tries to hit her with a hammer, but he is too weak. In the ensuing struggle, she breaks free, leaps through a window, and flees to the road. Leatherface and the hitchhiker give chase, but the latter is run over and killed by a passing truck. Leatherface attacks the truck with his chainsaw, and when the driver stops to help he knocks Leatherface down with a pipe wrench, causing the chainsaw to cut his leg. The driver flees, and Sally escapes in the back of a passing pickup truck as Leatherface maniacally flails his chainsaw in the air in anger and defeat.