Teenagers Katie and Becca discuss a legend about a cursed videotape; whoever watches it dies seven days later. Katie confesses that she watched the tape with her friends the previous week. That night, Katie is killed by an unseen force.
At Katie's funeral, Ruth, Katie's mother, urges her sister Rachel, a Seattle journalist, to investigate her daughter's death as she recalls the night she discovered Katie's disfigured body in the closet, with doctors being unable to explain the cause of death. Rachel discovers that Katie's friends were killed in bizarre accidents on the night of her death. She also learns that Becca has been institutionalized after witnessing Katie's death. Rachel goes to Shelter Mountain Inn, the mountain retreat where Katie and her friends watched the supposed cursed tape. While probing the inn's manager for details concerning Katie and her friends' stay, she notices an unmarked videotape on a nearby shelf advertising rental videos for guests; while the manager's back is turned, she slips the tape into her purse. She rents the same cabin that Katie stayed in and reluctantly watches the tape; it contains gruesome and disturbing imagery, culminating in the static image of a lone well in an empty field. After the tape ends, she receives a phone call from an unknown caller who whispers "seven days".
Rachel recruits the help of her ex-boyfriend Noah, a skeptical video analyst. He watches the tape and Rachel makes him a copy so they can both investigate where it came from. Rachel experiences supernatural symptoms of the curse, including irregular nosebleeds and having cords stuck in her throat, which she is forced to vomit out. She discovers hidden imagery of a lighthouse and identifies a woman on the tape: a horse breeder, Anna Morgan, who committed suicide after some of her horses drowned themselves off Moesko Island. Rachel finds their son, Aidan, watching the videotape.
Leaving Aidan in Ruth's care, Rachel heads for Moesko Island to speak to Anna's widower, Richard, while Noah travels to Eola Psychiatric Hospital to view Anna's medical files. On the ferry to the island, a horse is affected by Rachel's cursed presence and leaps to its death. On the island, she discovers Anna had an adopted daughter, Samara, but Richard denies it. Rachel speaks to the island doctor, who explains that Anna adopted Samara due to her infertility. Samara possessed the ability to psychically etch images onto objects and into minds, tormenting her parents and their horses. Noah finds a psychiatric file on Samara which mentions a missing video record last seen by Richard.
Rachel sneaks into the Morgan house and watches the missing video, which shows Samara explaining her powers during a psychotherapy session. Richard discovers her and strikes her. Horrified that Samara's evil is still at large, he electrocutes himself in the bathtub. Noah arrives and he and Rachel enter the barn. In a loft converted to a bedroom to isolate Samara from her mother, they find an image of a tree behind the wallpaper; Rachel recognizes it as a tree at the Shelter Mountain Inn.
Rachel returns with Noah to the cabin at Shelter Mountain Inn, where they are led to a well beneath the floorboards. They remove the lid and Rachel is pushed inside. A hand grabs her, and Rachel experiences a vision of Anna suffocating and dumping Samara into the well, where she survived for seven days. Samara's corpse surfaces from the water. After Rachel is rescued from the well, they arrange a proper burial for Samara. Noah tells Rachel that they are now safe as more than seven days have passed since she watched the videotape.
Aidan warns Rachel that it was a mistake to try to help Samara. Rachel realizes that Noah's seven days are up and rushes to save him, but the vengeful ghost of Samara materializes on his TV screen, crawls out of it and kills him. Rachel finds his disfigured corpse and returns home to destroy the tape. She concludes she was spared because she made a copy, which Aidan watched. Rachel has Aidan make a copy of the copy to show to someone else, saving him from Samara. Aidan asks what will happen to the person they show it to, but Rachel doesn't answer.
