It's noon. Concerned parents are lined up outside the schools waiting to escort their kids home for lunch. Signs along the street ask "Wer ist der Morder?" (Who is the murderer?) of eight children killed over the past year. Little Elsie Beckmann [Inge Landgut] has just become victim number nine.
Who is the murderer? It could be anyone (the viewer knows that it is Hans Beckert [Peter Lorre]). Neighbors are turning in neighbors and fingering strangers in the street just for talking to a child. The police are on the job 24 hours a day, but all they have turned up so far is some Ariston cigarette butts, some sugar grains, and a bag that held candy. They have investigated over 1,500 clues and have compiled 60 volumes of documents. Every thicket, every bush, every hole in the area has been combed. Every place from flop houses to underworld hangouts are being raided every night.
In fact, the police investigation has been so thorough that the Underground is getting worried about the shakedowns. Underworld boss Schränker [Gustaf Gründgens] has come to the conclusion that the child killer must be found before the police ruin business. After a lengthy discussion with all the Underworld bosses in attendance [there is a wonderful scenario where the Underworld bosses discuss strategies while the police do the same, such that it hard to tell the difference between Gangsters and Police], they decide that the best solution is to monitor all children at all times and that the best persons to do that, the only ones who can be seen on the streets without arousing suspicions, are beggars. So, every street has its beggar sitting in a doorway, having a smoke on the corner, watching the children and noting anyone following or with a child.
A break comes in the person of a blind balloon peddlar [Georg John] who hears a man whistling a tune and remembers the same tune being whistled by a man who purchased a balloon on the day Elsie Beckmann was murdered. He alerts his block's beggar, who follows the Beckert, who is leading a little girl into a candy store. When Beckert makes the mistake of throwing an orange peel on the sidewalk, the beggar pretends to slip on it and, while clutching Beckert for support, he transfers onto the back of Beckert's shoulder a big "M" that he previously chalked on his palm. The beggars are now able to follow the man with the "M" on his coat.
Meanwhile, the police have been attempting to trace the origin of a postcard sent by the child killer to the local newspaper. While investigating released criminals and mental patients that fit the profile of the killer (lazy, indolent, and of strong and pathological sexuality), the police come to Hans Beckert's apartment. Beckert isn't home, but the landlady shows them in. Searching Beckert's room, they find some Ariston cigarettes and a red pencil, the likes of which was used to write the postcard. Certain that Beckert is the killer, the police lay in wait for Beckert to return.
But Beckert is on the make. The little girl that he is with suddenly notices the "M" on his shoulder and offers to wipe it off. Certain that he has been caught, Beckert runs into an office building. The beggars contact Schränker who sends a group of gangsters to comb the building and capture the child killer. Unfortunately, the night watchman sounds an alarm, alerting the police. In the minutes before the police arrive, the gangsters find Beckert, and everyone, except for burglar Franz [Friedrich Gnass], manages to get out before the police arrive. To make Franz sing, Detective Lohmann lies to him that the night watchman at the building was killed during the gangsters' raid. The strategy has the desired effect. Fearing that he is going to face a murder rap, Franz tells how the gangsters have captured the child killer and taken him to an abandoned distillery to stand trial.
Meanwhile, in the basement of the abandoned distillery a kangaroo court is in session, comprising of the leaders and the members of the various criminal organizations. When Beckert explains to Schränker that he is driven by a voice and an evil impulse he can't control, it is voted to eliminate him so that there is no chance of him ever getting free to murder another child. Only Beckert's appointed defense counsel [Rudolf Blumner] argues that, since Beckert is driven by an uncontrollable impulse, he cannot be held responsible for his actions and should be turned over to the police so that the state can render him harmless. At that moment, the police enter the distillery and escort Beckert away.
Epilogue: As Beckert's real trial progresses, the mothers of the slain children listen to the verdict. The ultimate and final comment comes from Frau Beckmann [Ellen Widmann] who says that none of this will bring back the children and that mothers must keep a closer watch over them. [Original synopsis by bj_kuehl]