As the Californian coastal town of Antonio Bay is about to celebrate its centennial, strange phenomena occur. Objects move by themselves, machines turn themselves on, and all the public payphones ring simultaneously. Priest Father Malone is in his church, when a piece of stone falls from the wall revealing a cavity. Inside is an old journal, his grandfather's diary from a century ago. Malone removes the journal, which reveals that, in 1880, six of the founders of Antonio Bay (including Malone's grandfather) deliberately sank and plundered a ship named the Elizabeth Dane. The ship was owned by Blake, a wealthy man with leprosy, who wanted to establish a colony near Antonio Bay. One foggy night, the six conspirators lit a fire on the beach near treacherous rocks. The ship's crew, deceived by the false beacon, crashed into the rocks and perished. The conspirators were motivated by both greed and disgust at the notion of having such a colony nearby. Antonio Bay and its church were then founded with the gold plundered from the ship.
A supernaturally glowing fog appears over the sea, moving against the wind. Three local fishermen are out at sea when the fog envelops their trailer. An old clipper ship pulls alongside their trawler. It is the Elizabeth Dane carrying the vengeful ghosts of Blake and his crew, who have come back on the hundredth anniversary of the shipwreck and the founding of the town. The three fishermen are slaughtered. At the same time, town resident Nick Castle is driving home and picks up a young hitchhiker named Elizabeth Solley. As they drive towards town, all the truck's windows inexplicably shatter.
The following morning, local radio DJ Stevie Wayne is given a piece of driftwood inscribed with the word "DANE" that was found on the beach by her young son Andy. Intrigued, Stevie takes it with her to the lighthouse she broadcasts her radio show from. She sets the wood down next to a tape player that is playing, but the wood inexplicably begins to seep water causing the tape player to short out. A mysterious man's voice emerges from the tape player swearing revenge, and the words "6 Must Die" appear on the wood before it bursts into flames. Stevie quickly extinguishes the fire, but then sees that the wood once again reads "DANE" and the tape player begins working normally again.
After locating the missing trailer, Nick and Elizabeth find the corpse of Dick Baxter with his eyes gouged out. The other two fishermen are nowhere to be found. The town´s coroner, Dr. Phibes, is perplexed by the body's advanced state of decomposition considering Baxter died only hours earlier. While Elizabeth is alone in the autopsy room, Baxter's corpse rises from the autopsy table and approaches her. As Elizabeth screams, Nick and Phibes rush back into the room where they see the corpse lifeless again on the floor, appearing to have scratched the number "3" onto the floor with a scalpel. Baxter was the third victim to die. Meanwhile, Kathy Williams, the organizer of the town's centennial, visits Father Malone. He reads the journal to her, revealing how the town was founded and that their celebration is honoring murderers.
That evening, the town's celebrations begin. Local weatherman Dan calls Stevie at the radio station to tell her that another fog bank has appeared and is moving towards town. As they are talking, the fog gathers outside the weather station and Dan hears a knock at the door. He answers it and is killed by the ghosts as Stevie listens in horror. As Stevie continues her radio broadcast, the fog begins moving inland and neutralizes the town's phone and electricity lines. Using a back-up generator, Stevie begs her listeners to go to her house and save her son when she sees the fog closing in from her lighthouse vantage point. At Stevie's home, her son's babysitter, Mrs. Kobritz, is killed by the ghosts as the fog envelops the house. The ghosts then pursue Andy, but Nick arrives just in time to rescue him.
As the town's celebration comes to an end, Kathy and her assistant Sandy are driving home when they turn on the car radio and hear Stevie warning people about the dangerous fog sweeping through town. Stevie advises everyone to go to the church, which appears to be the only safe place. Nick, Elizabeth, and Andy hear the same message and the group gather there. Once inside, they and Father Malone take refuge in a small back room as the fog begins to appear outside. Inside the room, they find a large gold cross buried in the walls, made of the gold that was stolen from Blake a century earlier. As the ghosts begin their attack, Malone takes the gold cross out into the chapel. Knowing he is a descendant of one of the conspirators, Malone confronts Blake and offers himself to save everyone else. Back at the lighthouse, more ghosts attack Stevie, trapping her on the roof. Inside the church, Blake seizes the gold cross which begins to glow. Nick pulls Malone away from the cross only seconds before it disappears in a blinding flash of light, along with Blake and his crew. The ghosts attacking Stevie at the lighthouse also disappear, and the fog vanishes. Later that night, Malone is alone in the church pondering why Blake didn't kill him and thus take six lives. The fog then reappears inside the church along with the ghosts, and Blake decapitates Malone.
- Adrienne Barbeau as Stevie Wayne
- Jamie Lee Curtis as Elizabeth Solley
- Janet Leigh as Kathy Williams
- John Houseman as Mr. Machen
- Tom Atkins as Nick Castle
- James Canning as Dick Baxter
- Charles Cyphers as Dan O'Bannon
- Nancy Loomis as Sandy Fadel
- Ty Mitchell as Andy Wayne
- Hal Holbrook as Father Malone
- John F. Goff as Al Williams
- George 'Buck' Flower as Tommy Wallace
- Darwin Joston as Dr. Phibes
- Rob Bottin as Blake
- John Carpenter as Bennett