On October 23, in Northern California, shop owner Harry Grimbridge the Third is chased along a barren road by mysterious men in suits. He makes it to a gas station, clutching a jack-o’-lantern mask. He is driven to the hospital by station attendant Walter Jones. At the hospital, Harry is placed in the care of Dr. Dan Challis, a hardworking doctor struggling with the relationships between him and his ex-wife, as well as his children. That night, another man in a suit enters Harry’s hospital room, murders him, then immolates himself. A few days later, Dan is confronted in a bar by Harry’s daughter, Ellie. He tells her about the strange events of the night Harry died and shows her the mask her father was holding when he was admitted to the hospital. Along with Ellie, Dan traces the mask back to Silver Shamrock Novelties, a company based in the town of Santa Mira, California. The motel manager explains that Conal Cochran and his company, Silver Shamrock Novelties, which produces wildly popular latex jack-o-lantern, witch and skeleton masks for Halloween, are responsible for the town’s prosperity. While signing the motel register, Dan learns that Harry stayed at the same motel. Other motel guests include shop owners Marge Guttman and Buddy Kupfer, Buddy’s wife, Betty, and their son, Little Buddy, who all have business at the company’s factory.
Guttman finds a microchip on the back of a Silver Shamrock button, and is electrocuted by its laser beam after poking it with a hairpin. Dan and Ellie learn of Guttman’s accident, and Dan attempts to help, but is forced away by a group of men dressed in lab coats, who drive away in a Silver Shamrock van with Marge’s body. Cochran arrives and tells everyone not to worry. The next morning, Dan and Ellie tour the factory with the Kupfers, and discover Harry’s car there, guarded by more men dressed in suits. They return to the motel, but cannot contact anyone outside the town. While Dan attempts to phone for the authorities, Ellie mysteriously disappears and Dan is captured by the men in suits who are revealed to be androids created by Cochran. Cochran reveals his plan to sacrifice children wearing his masks on Halloween, thus bringing about a resurrection of the ancient age of witchcraft. For Silver Shamrock’s “Big Giveaway”, which will air at 9:00 P.M. on all television channels following the “Horrorthon”, each of these masks contain a fragment of Stonehenge implanted in its trademark microchip. When activated by a flashing signal of the commercial’s on-screen “magic pumpkin”, the microchip causes the mask wearer to succumb to brain damage from absorbing the energy of Stonehenge and unleashes a swarm of insects and snakes that come out of the wearer’s corpse and kill anyone nearby. To demonstrate, Cochran kills the Kupfers this way.
Later that night, Cochran puts a Silver Shamrock mask on Dan, and leaves him to die the same fate as the trick-or-treating children, who will come back home for his false watch-and-win Halloween sweepstakes that he created for his company. Dan, destroying the television set and removing the mask, escapes through a ventilation shaft and rescues Ellie. He dumps the chips from the overhead rafters, and activates their signal with the commercial, killing Cochran’s employees, while Cochran is vaporized by the Stonehenge rune he was using to create his masks, and destroying the computer chips along with the entire Silver Shamrock factory.
As the two drive away, Ellie attacks Dan, revealing herself to be an android duplicate and that Cochran’s henchman presumably killed her. Dan crashes the vehicle but decapitates the android with a tire iron. On foot, Dan arrives at Walter’s gas station, where he contacts the television stations and attempts to convince all the station managers to remove the commercial. At the same moment, a group of trick-or-treaters, wearing Silver Shamrock masks, arrive at the station to participate in the “Big Giveaway” on Walter’s television. Dan persuades the stations to take it off channels one and two, but on channel three the commercial keeps on playing. Dan desperately screams on the phone for the final station to turn off the commercial. The fate of Dan, Walter and the children are unknown.