The film starts off with the original rhyme as told by Maleva. It then cuts to Ben Talbot, in the Blackmoor woods armed with a pistol. He is confronted by a werewolf which claws his face and then guts him. He flees towards a nearby mausoleum, with the creature in pursuit.
Travelling actor Lawrence Talbot returns to his ancestral home to investigate the whereabouts of his recently missing brother upon request from Ben's fiance Gwen Conliffe, via written letter. His distant and eccentric father Sir John Talbot greets him and reveals that his brother Ben's body was already found in a ditch and surmises he will attend the funeral. Lawrence inquires about the body and goes to see it, where it is stored at the local mortuary: Ben's remains are thoroughly mangled and torn apart.
He finds a mysterious medallion among his brother's belongings, and is told it came from the nearby Gypsy camp, to which Ben acted as the town's liaison. He travels there, against his father's admonition and on a full moon. He arrives at the camp and is told that the item is from Maleva. He goes to see her and she warns him of great danger. An unnamed werewolf suddenly rampages through the camp, killing and maiming most of the villagers. A young boy strays from the camp and the werewolf gives chase. Lawrence follows, armed, but the boy ignores him. He is subsequently attacked by the werewolf and bitten on the neck, though the gypsies scare it off and Lawrence is tended to and taken to his father.
He heals unnaturally quickly and finds the wound no more than just a scar (which disappears later). He explores his house at night, remembering walking outside during the night and finding his father cradling his dead mother (she had slit her own throat with a straight razor). Inspector Francis Aberline of Scotland Yard arrives and questions Lawrence: both are suspicious of each other, and Aberline departs. Lawrence wanders to a nearby lake and Gwen follows, where they converse and seem to establish a flirtatious relationship. Soon after priests and the local religious men arrive to take Lawrence away and kill him, claiming he "bears the mark of the beast", but his father saves him, threatening to shoot them if they trespass at Talbot Hall again.
Many nights after on the full moon, the villagers arm themselves with guns packed with silver bullets and set a trap for the werewolf at the ruins of an old church, using a stag as bait. That night, Lawrence sees his father walking out to the crypt. He follows and finds a cell containing his father and a shrine to his mother. Sir John then locks the door with Lawrence outside just as his son begins to transform into the Wolfman for the first time. Elsewhere, Aberline plans to spend the evening at the local tavern to wait for the suspect's attack. Lawrence, now fully changed alerts everyone to his presence by howling for the first time. He attacks and kills all of the villagers that set the trap, and Aberline stumbles upon the horrific aftermath.
When he changes back the next day he is greeted by his father. He is arrested by the police and Aberline, and is taken to the mental institution his father sent him to as a child. He is relentlessly tortured by the doctors, who claim his lycanthropy is simply a delusion: he also begins to suffer severe hallucinations involving the Wolfman and Gwen. He awakens in his cell sometime later, his father now with him. He explains that the institution had convinced him that his mother killed herself, but what he really saw was his father as a werewolf, who had killed his mother. Sir John then explains how he was bitten by a wolf-boy or feral child in a cave when he was game hunting in the Hindu Kush mountains with his friends, and how for the past 25 years, Singh the man servant has locked him in the crypt, but one night in a jealous, drunken rage (as Sir John confessed that he had become attracted to and obsessed with Gwen) he incapacitated Singh and was therefore unable to lock himself in, resulting in Ben's death at his hands. It is and also confirmed that it was Sir John who bit Lawrence. Lawrence vows to kill his father, a threat Sir John blithely dismisses.
Lawrence is taken into a court of scholars to prove to Lawrence as the full moon comes out that he will not transform. He transforms and butchers a number of the men in attendance (including the doctors and orderlies who tortured him), then rampages across London until dawn. He flees to Gwen's home for safety: she takes him in and they admit their feelings to each other. Aberline orders his men to capture Lawrence, who is traveling back to Blackmoor to kill Sir John. Meanwhile, Gwen meets with Maleva where she tries to find a way to lift the curse.
Lawrence arrives at Talbot Manor to find Singh's rotting and eviscerated body. Lawrence arms himself with the man servant's silver bullets and finds one of Aberline's men, dead in Sir John's armchair. He meets his father and tries to shoot, but Sir John reveals that he removed the gunpowder from the bullets long ago. Both he and Lawrence transform and fight, setting the mansion on fire in the process. Sir John has the upper hand on Lawrence until he is kicked into the fireplace: Lawrence knocks his burning father's head off. Aberline and Gwen arrive on the scene. Aberline tries to shoot, but Gwen pushes him away, allowing the Wolfman to bite Aberline and throw him aside. Gwen runs into the forest, only to be chased down by the Wolfman. Just as Lawrence is about to attack, she pleads for him to stop, bringing out the slightest of human emotions left in him. But when he hears the nearby mob, he violently panics, losing his restraint. Gwen then shoots Lawrence with a silver bullet in reluctant self-defense. Before he dies he turns back into a human and spends his last moments with Gwen. The mob arrive and they see Aberline, who appears clutching the silver cane. Gwen's parting words are heard as Talbot Manor appears in flames and a wolf's howl is heard, presumably from Aberline.
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