In Baltimore, Maryland, Dr. Hannibal Lecter attends a symphonic orchestra performance of A Midsummer Night's Dream. He is irritated by a flute player who repeatedly misses out on his part. Later, he hosts a dinner party in his townhouse for the orchestra's board of directors. During conversation, the disappearance of the flute player is brought up. When one of the guests asks about the dish Lecter made, he responds that if he tells her, she might not try it, implying he is serving the flute player.
Lecter is visited by Will Graham, a gifted FBI agent who has the ability to empathize with psychopaths. Graham has been working with Lecter on a psychological profile of a serial killer. The killer removed edible body parts from his victims, leading Graham to believe him to be a cannibal. During the consultation, Graham discovers evidence implicating Lecter. Lecter attacks and almost disembowels Graham, before Graham impales him with several arrows then empties his handgun into him. Lecter is sentenced to life imprisonment in an institution for the criminally insane. Graham is traumatized by the experience, and retires.
Some years later, another serial killer, nicknamed The Tooth Fairy, appears. He stalks and kills entire families during sequential full moons. Special Agent Jack Crawford seeks Graham's assistance in determining the killer's psychological profile. When the death of another family weighs on his conscience, Graham reluctantly agrees. After visiting the crime scenes and speaking with Crawford, Graham concludes he must once again consult Lecter.
The Tooth Fairy is actually Francis Dolarhyde, who kills at the behest of an alternate personality he calls "The Great Red Dragon". He is obsessed with the William Blake painting The Great Red Dragon and the Woman Clothed in Sun, and believes that each victim he "changes" brings him closer to "becoming" the Dragon. His pathology is born from the severe abuse he suffered as a child at the hands of his sadistic grandmother.
Meanwhile, Freddy Lounds, a tabloid reporter, who hounded Graham after Lecter's capture, follows him for leads on The Tooth Fairy. There is a secret correspondence between Lecter and Dolarhyde. Graham's wife and son are endangered when Lecter gives The Tooth Fairy the agent's home address, forcing them to be relocated to a farm owned by Crawford's brother. Hoping to lure out The Tooth Fairy, Graham gives Lounds an interview in which he disparages the killer as an impotent homosexual. This provokes Dolarhyde, who kidnaps Lounds and glues him to an antique wheelchair. Dolarhyde then forces Lounds to recant his allegations, bites off his lips and then sets him on fire outside his newspaper's offices.
Later, at his job in a St. Louis photo lab, Dolarhyde falls in love with Reba McClane, a blind co-worker. He takes her home, where they make love. However, his alternate personality demands that he kill her. Desperate to stop the Dragon's "possession" of him, Dolarhyde goes to the Brooklyn Museum, tears apart the original Blake painting and eats it.
Meanwhile, Graham deduces that the killer knew the layout of his victims' houses from their home videos. He concludes that the killer works for a company that transfers home movies to video cassette and edits them. He starts searching the companies and their workers.
Watching Reba's house, Dolarhyde finds her having spent the evening with a co-worker, Ralph Mandy, whom she actually dislikes. Enraged by this apparent betrayal, Dolarhyde kills Ralph, kidnaps Reba, takes her to his house, and then sets it on fire. Finding himself unable to shoot her, Dolarhyde apparently shoots himself. Reba is able to escape the house as the police arrive.
Dolarhyde, having staged his own death, turns up at Graham's home in Florida. He holds Graham's son hostage, threatening to kill him. To save his son, Graham slings insults at the boy, reminding Dolarhyde of his grandmother's abuse. Enraged, Dolarhyde attacks Graham. Both men are severely wounded in a shootout which ends when Graham's wife kills Dolarhyde. Graham receives a letter from Lecter which praises him for stopping The Tooth Fairy, bids him well, and says they are going to cross paths soon.
Some time later, Lecter's jailer, Dr. Frederick Chilton, tells him that he has a visitor, a young woman from the FBI. Lecter curiously asks of her name.
What killer does Graham try to capture?
Tooth Fairy