On Saturday, October 23, 1982, shop owner Harry Grimbridge (Al Berry) runs along a barren stretch of road in Northern California. A vehicle containing mysterious figures in business suits is chasing him. Grimbridge is attacked by one of the mysterious figures but escapes. Grimbridge collapses at a gas station clutching a Silver Shamrock jack-o'-lantern mask. He is driven to the hospital by the station attendant Walter Jones (Essex Smith), all the while ranting, "They're going to kill us. They're going to kill us all."
At the hospital, Grimbridge is placed in the care of Dr. Dan Challis (Tom Atkins). That night, while Grimbridge sleeps, another mysterious man in a suit enters Grimbridge's hospital room and kills him, then goes to his car and immolates himself.
The next morning, Grimbridge's daughter, Ellie (Stacey Nelkin) arrives to identify her father's remains. Ellie and Challis agree to investigate Harry's murder, leading them to the small town of Santa Mira, California, home of the Silver Shamrock Novelties factory. The motel manager (Michael Currie) describes the source of the town's prosperity: irishman Conal Cochran (Dan O'Herlihy) and his factory, which produces wildly popular whole head latex masks for Halloween. While signing the motel register, Challis learns that Ellie's father stayed at the same motel. Other motel guests include shop owners Marge Guttman (Garn Stephens) and Buddy Kupfer (Ralph Strait), Buddy's wife Betty (Jadeen Barbor) and their son Little Buddy (Bradley Schacter). All have business at the factory.
Guttman finds a microchip affixed to the back of the Silver Shamrock logo on one Halloween mask. She pokes it with a hair pin, causing an electrical discharge that kills her. Challis and Ellie are awakened by the sound of vehicles and learn of Guttman's accident. Challis attempts to help but is forced away by a group of emotionless men dressed in lab coats.
The next morning Challis and Ellie tour the factory with the Kupfers and are alarmed to discover Grimbridge's car there, guarded by more men dressed in suits. They return to the motel but cannot contact anyone outside the town. While Challis attempts to phone for the authorities, Ellie is kidnapped by the men in suits and driven to the factory. Challis pursues them, breaks into the factory, and discovers that the men in suits are androids created by Cochran. Challis is captured by the androids and Cochran reveals his plan: when children wearing the popular masks viewed by his television commercial on Halloween night, they will die as sacrifices to the Old Gods, bringing about a resurrection of the ancient age of witchcraft. The masks contain microchips, each containing a fragment of Stonehenge. A signal in the commercial activates the chips, summoning a lethal swarm of insects and snakes to kill the mask wearer and anyone nearby. To demonstrate, Cochran forces the Kupfers to wear masks and plays the commercial.
Challis escapes through a ventilation shaft and rescues Ellie. He plays the commercial and dumps the chips from the overhead rafters, killing Cochran and his employees, and destroying the computer chips and factory. As the two drive away, "Ellie" attacks Challis, revealing that Cochran replaced the real Ellie with an android duplicate. Challis crashes the vehicle and decapitates the android with a tire iron. Challis returns on foot to the filling station and desperately attempts to phone the television stations, convincing all but one to not broadcast the commercial. Challis screams at the person on the other end of the line to "stop it", but to no apparent avail.
Who rescues Ellie?
Challis