A Japanese man has recently arrived at a little village in the mountains of South Korea, living in a secluded house. A mysterious disease starts spreading among the villagers, causing a rash which precedes violent murderous outbreaks followed by stupor and eventually death.
Police officer Jong-goo, who is investigating the case, meets a mysterious young woman called Moo-myeong ("no name" in Korean), who tells him about the Japanese stranger, and later disappears. A local hunter tells Jong-goo that he saw the near-naked stranger eating a deer, with glowing red eyes. Jong-goo is unsettled, as he has had dreams about this stranger, which the hunter had described to him. He enlists the help of another police officer, and a Japanese-speaking deacon to serve as an interpreter, and they investigate the stranger's house while he is away. The other police officer finds pictures of the infected and murdered residents and their belongings. He is too shocked to say anything to the others. The stranger's house guard dog attacks the deacon and Jong-goo. The stranger arrives and pacifies the dog, and the other three leave.
The police officer tells Jong-goo of what he saw, and hands over a shoe which belongs to Jong-goo's daughter, Hyo-jin. Soon, Hyo-jin becomes sick and displays similar symptoms as the other infected villagers. Jong-goo makes his way to the stranger's house with the deacon in anger, but finds that the pictures and evidence have been burned. Infuriated, he destroys the stranger's worship room and kills the dog when it attacks him, ordering the stranger to leave the village.
Distraught about Hyo-jin's condition, Jong-goo's mother-in-law seeks help from a shaman, Il-gwang. As Il-gwang performs a ritual to exorcise the demon, the stranger performs a ritual in his house simultaneously. Jong-goo finds his daughter in pain and interrupts the ritual, taking her to a hospital instead. The following day, he gathers his friends to hunt down the stranger, believing that the stranger is responsible for the disease and murders. Jong-goo and his friends go after the stranger, and are attacked by another infected villager. After a chase they eventually end up hitting the stranger with their vehicle. They dispose of his body as Moo-myeong watches from the hills. When Jong-goo returns home, he finds that Hyo-jin's condition has seemingly improved. Il-gwang suspects they killed the wrong person; he later encounters Moo-myeong, and starts vomiting blood. He calls Jong-goo, telling him that Moo-myeong is the real demon.
Jong-goo finds Moo-myeong near his house. She requests Jong-goo to believe her, telling him she had set a trap for the demon, but the trap will not work if Jong-goo goes back to his house. Il-gwang calls Jong-goo and tells him not to believe Moo-myeong, while she in turn tells him Il-gwang is actually in league with the real demon. Confused and hesitant, Jong-goo eventually leaves to save his family, but Moo-myeong grabs him, her skin turning a ghostly white as he notices that she is wearing the personal items of some of the victims. He pulls himself away, and as he crosses his home's threshold, the floral trap withers.
The deacon encounters the still-alive Japanese stranger in a cave. After being photographed by the stranger, the deacon witnesses the stranger evolving into a demon. Back at his house, Jong-goo arrives to find that Hyo-jin has murdered their family. He calls out to her, but she stabs him and falls into a stupor. Il-gwang arrives at Jong-goo's house and takes photographs of the family. While returning to his car, he unintentionally drops a box filled with photos of the other victims.
As Jong-goo lies dying in his home, he sees visions of happier times with his daughter and assures her he will protect her.