In the opening shot, a voice-over narrator explains that in the early 21st Century, the Umbrella Corporation is the leading company in the world. Currently 9 out of 10 homes own products from them. But what the public doesn't know is that the Umbrella Corporation really make weapons for armies, military, etc., and also creates viral chemicals for biological and chemical warfare. And that there is the Hive; a secret Umbrella lab half-a-mile underneath Raccoon City where over 500 people live and work for the Umbrella Corporation.
A man in a protective suit handles blue-tinted T-virus and its green-tinted antidote, using mechanical arms. He then puts all of them in a lockable suitcase except for one of the T-viruses, which he throws and breaks. The virus spreads out through the vents. We cut to a man drinking coffee. Another man whose face is unseen bumps into him and knocks the coffee all over him (important later). He goes into an elevator with some other people.
It cuts to some people working in the lab where the virus had broken. The bio emergency alarm goes off. Everyone thinks it's a drill, but then the emergency water comes on, flooding the lab. They try to stop it, screaming at the camera to make it stop (all the cameras, which are shown a lot through the movie, are being controlled by a supercomputer called Red Queen). The doors are locked. Then gas comes on in the offices making everyone pass out. During this, the elevator mentioned earlier has stopped and starts falling. It stops at level three. One lady tries to get off but the elevator drops, stopping before her head meets the floor. The others try to pull her back in, but the elevator goes up suddenly and her head is chopped off.
In the next shot, a young woman named Alice (Milla Jovovich) wakes up in a shower. Apparently she suffered a case of amnesia. She walks out into her bedroom and looks in her drawers. At the third one, she is surprised to find a gun locked up (important later). She does not know where she is. She goes into the hall and finds a picture of herself with a man. Then she sees movement, walks outside and calls out into the darkness. Suddenly birds fly out of the trees and the wind begins to pick up. She is then pulled inside by someone, and SWAT officers jump through the windows. One of them, James (Colin Salmon), also known as 'One' the leader, grabs Alice and tells her who they are. Then another officer, Rain (Michelle Rodriguez) apprehends the man, named Matt, (Eric Mabius) who tells them he's a cop.
They go downstairs to an underground warehouse under the mansion , leading to railroad tracks with a parked train on it. Alice asks James who they are and why they are here. James says that they are a team sent to destroy the Red Queen (Michaela Dicker) in the Hive, an underground facility home to 500 scientists. Five hours ago a virus spread through the facility, killing everyone in it. Then James tells Alice that she had been one of the three security guards to the facility (important later). They find a train that is not working. Rain goes under to fix it. She works on it, then she hears some noises, it turns out to be one of the officers above, who scares her. Then she turns on the electricity. They go on the train and Rain is trying to close the door. Another officer, Kaplan (Martin Crewes), tries to close it, but then a man (James Purefoy) falls through after hiding in a compartment. Alice sees him and remembers that he was the man in the picture earlier. He also has no memory.
Upon arrival at the Hive, the group batters down the locked steel door and tries to find the Red Queen's chamber. They pass through a hall where there is glass wall on one side. On the other side is the flooded facility. Suddenly a dead woman floats forward. Alice asks how long the amnesia will last. James says it was caused by a gas released when the virus spread, and it should last for maybe an hour. They all leave, and the dead girl opens her eyes and hits the window with her hand.
Alice and the group wander into a giant room where one of the doors leads to the Red Queen chamber. Alice looks though a window in the door to see if there is anything in there. There is, but she does not know it. It turns out to be a giant monster.
She, Kaplan, another man, Dana (one of the two female officers) and James enter the Red Queen's chamber. Kaplan turns on the electricity to the chamber. Dana, James, and the other man go into a smaller room. Kaplan finds the code and the door opens. Suddenly the entrance to the cube room closes. They scream for Kaplan to open it. A laser appears and quickly moves along the room towards them. James ducks, but the laser takes off the other man's fingers. Dana unfortunately gets her head lasered off. The laser disappears once it reaches the end of the room and another one appears at the far end of the room, again moving quickly towards them. One man is cut in half. When another laser comes James thinks he has worked out its route and can dodge it, but it splits into a tight grid spread right across the room. Just when Kaplan screams he's overruled the defences, James is diced. Alice and Kaplan go in through the end door. They turn on the system and a hologram of a little girl appears. She tells them that they're all going to die down here.
Rain hears a noise and finds a woman. The woman looks helpless, but then lunges forward and bites Rain's hand. The other man, J:D, walks over and shoots her in the leg. She doesn't die. Then Rain shoots her with a machine gun. The girl dies. Matt picks up the keys to his handcuffs while the team looks away. When they talk, they look and see that the girl is gone. Then they hear noises of something metal dragging on the ground. It shows a zombie dragging an axe, then a bunch of blood-covered zombies come out from all directions, surrounding everyone, including Spencer (the man in the picture), Kaplan, Rain and J:D. Matt is trying to uncuff himself while everyone begins shooting. A zombie comes at Matt but is shot by Alice. They split up. Kaplan is trying to open the door using passcodes while Spencer is rushing him. Soon, J:D kills a zombie and then moves Kaplan out of the way to open the door, While failing to get remember some numbers for the code, Kaplan finally gets it right and J:D successfully unlocks the code. Then the door opens. Zombies rush through and J:D is caught, as while Rain tries to pull him back, but she gets bitten again on her right arm. They are unsuccessful and they go into the Red Queen's chamber while J:D perishes.
Alice is seen wandering through a room. She notices a bunch of cages with holes in them, like something broke through them. She stops when she hears a noise. She looks and sees a zombie dog with all of its flesh gone. It chases her and she runs into a room, where there is a zombie. She punches him a few times and then kung-fu kicks him.
She wonders how she did it and then remembers what James had told her about being a security guard. She had been trained in martial arts. Then a dog jumps through the window. She runs into a room and locks the door. Then she turns around and finds about five or six more zombie dogs. They run at her and she starts shooting with the gun she stole from the zombie scientist. Then another one, hiding in a cabinet jumps at her. She steps on a box, pushes her self off the wall, and kicks the dog in the face.
Then we see Matt wandering through some offices. He goes to one of the cubicles and finds Dr. Lisa's, who had been shown earlier on the elevator. Then suddenly, a zombie hits the window and scares Matt.
Then it cuts to the big room where all the zombies had been. The door that Alice had been observing is knocked down, and a giant ugly monster jumps through.
Matt is still observing the cubicle when he hears someone. He looks and sees Lisa (Heike Makatsch), who looks innocent until she gets close. Then she tries to bite him, until Alice stabs Lisa in the back of her neck. Alice then has a flashback of her talking to Lisa about infiltrating the Umbrella Corporation and getting the virus to show the press. Then we hear Matt, who says that Lisa was his sister. Then he says that one of the workers had tried to get Lisa into the building (Alice) but betrayed her (not true).
Everyone is barracaded in the control room. Matt and Alice come in with a bunch of zombies following them. They can't escape so they end up going back to the Red Queen room, where they ask the hologram how to escape. The hologram of the little girl, the Red Queen, appears and tells them all about the T-virus and how she was forced to lock up the facility to prevent the virus from escaping and contaminating the rest of the world's population.The T-virus was designed in the Umbrella Corp labs in the Hive as an experiment to prolong life, except the virus mutated and all of the people that were trapped in the underground facility when the bio scanners went off died and are now zombies who need to feed on living flesh to survive. Anyone whom is bitten or scratched by one of the zombies will become one too. As she explains all of this, the camera cuts to a deceased J:D who reanimates. Rain has already been bitten more then once. Alice asks the Red Queen how can they get away and the Red Queen agrees to help them. They go over to the corner and find the sewer entrance. They go down, but then a bunch of zombies appear and attack them from both directions. Everyone climbs on top of the pipes, but in the process, Kaplan is bitten on the leg while Rain gets bitten again on both of her arms. She then finds her gun and is shocked when she points it at a reanimated J:D. She hesitates to shoot but when she says his name, he comes close to her and bites her neck, some zombies nearly attack her but she breaks free. As a zombified J:D attempts to attack again, Rain shoots him dead.
They all get to other side except for Kaplan. The pipe breaks and Kaplan falls but gets up in time. He tells them to leave. He puts a gun to his mouth. It shows Alice and she hears the shot. Turns out, Kaplan had shot a zombie and he goes around the center of the pipe standing vertical.
Then Alice, the sickly Rain, Spencer, and Matt are walking through some corridors when Alice imagines people walking through and then she imagines the lab. She is looking through a window. It shows some scientist injecting the T-Virus into a rabbit and then it shows some green liquid. There is a vaccine. She tells Rain, whom by now is turning deathly pail and can barely walk. They go to where the lab was and it's flooded. Alice walks to where the vaccines should have been, but they're gone.
Then Spencer has a flashback. It shows him overhearing Alice talking with Lisa about stealing a sample of the T-Virus to go public with the Umbrella Corporation's nefarious plans. Spencer decides to destroy the Hive before anything can be made public. Spencer is seen operating a machine handling the viruses, then it shows him throwing the T-Virus deliberately infecting the facility, then it shows him in a hurry walking out. He was the man in the opening shot who stole the T-Virus and was the one who bumped into the man knocking coffee all over him, then he gets out via the train. He had been hiding on the train, until J:D had opened the door and he fell through. Alice realizes it had been him and dives for the gun, but not before Spencer. He points it at Matt not knowing that there is a zombie behind him. The zombie bites him, then he shoots the zombie. He goes out the door. They think he is getting away, but then the TV turns on showing the Red Queen, who says that's not true and that "I've been a bad girl."
Then we see Spencer walking to the spot on the trail where he hid the vaccine. He is about to inject himself when he hears something. He looks up at the ceiling where after a few seconds, a giant monster, the Licker, is seen crawling along the ceiling. Spencer looks up towards it and says "Oh my God" in shock, before the Licker drops to the ground. A panicked Spencer attempts to flee, only to be quickly mauled and killed by the Licker.
Back in the flooded lab the Red Queen tells Alice that in order to get the code to open the door, she must kill Rain, who is infected and dying. Rain says OK and tells Alice to kill her and give her a fire axe she takes from the wall. She keeps telling Alice to kill her and it looks like she is until she hits the screen instead. Then the Licker jumps against the glass and cracks it. It does it a few more times then disappears. Then Kaplan, thought dead, comes through a door. They are all happy until the Licker comes back. They go out where they make it to the train and Alice finds the vaccine, but not before a zombified Spencer awakens, After mocking to him with "I'm missing you already", Alice kills him by bashing on his head with an axe, she then abandons her wedding ring before leaving on the train.
As Kaplan drives the train back to the mansion, they inject the vaccine into Rain, who sits there talking, telling Alice she'll know what to do when the time comes. Her head falls and Alice is about to shoot her when she awakes and says she's not dead yet. Then some claws scratch through the metal, scratching Matt on the arm. They look to where they should shoot. Then the door to the cockpit opens and Kaplan perishes after the Licker pulls him out. The Licker bursts through the train and tries to kill Alice, who shoots it in the head. But the Licker keeps on coming and its tongue wraps around her leg, which she stabs. She tells Matt to knock it out the train, but then Rain awakens and has transformed into a zombie. She tries to bite Matt, who then shoots her in the head, killing her. The zombified Rain lands at the button, which pushes and opens the floor door where the Licker is standing on. The Licker drops out and gets squashed by the train, where it is burned to death. Alice then shuts the floor door which cuts the Licker's tongue, finally killing it for good.
Matt and Alice get out just in time before the emergency doors close. Matt tells Alice that with the vaccine and the T-Virus sample, they will make public about what Umbrella Corporation is really doing when he drops to the floor complaining of pain in his arm. Suddenly, bunch of protectively-clothed scientists burst through the door. They take Matt and say that they're going to put him the Nemesis program when they see that he is infected and his scratch wounds on his arm begin pulsating. Then they take Alice and we hear them ordering her to be quarantined to check for the T-Virus. We hear them say that they're going back in the Hive to find out what when on down there....
Alice wakes up in a white room with cords sticking in her head and arm. She rips them out. Then she goes to the mirror and screams for them to let her out. Something whose face is not seen walks by the opposite side. She goes over to the door and gets a needle which she jams into the door code opener. She finds that she is in the Raccoon City Hospital and the place appears deserted. She walks outside in Raccoon City and sees that everything is destroyed. There are no people or bodies anywhere. It shows a newspaper headlined "The Dead Walk!" It is apparent the the T-Virus has escaped from the Hive and has now infected the entire city. Then she walks over to an abandoned cop car, stealing a pump action shotgun.
The final shot shows Alice pump the shotgun and standing in the middle of the deserted street which then pans out showing the destroyed city.