In 1971, demonologists Ed Warren and Lorraine Warren bring the possessed Annabelle doll to their home after two nurses, Debbie and Camilla, report violent incidents linked to the doll in their apartment. On their way home, Ed encounters terrifying spirits summoned by Annabelle but miraculously survives. Subsequently, the doll is secured in a sacred glass case in the couple's artifacts room, blessed by Father Gordon to contain its malevolent powers.
Fast forward to 1972, as the Warrens prepare for another paranormal investigation, they welcome Mary Ellen, who is set to babysit their daughter, Judy Warren. At school, Judy begins to notice the spirit of a priest who starts following her. Meanwhile, Mary Ellen visits a supermarket with her crush, Bob Palmeri, and begins baking a cake for Judy's birthday. The scene takes a turn when their friend Daniela arrives unannounced, intrigued by the supernatural due to her father's passing.
Daniela gifts Judy a pair of roller skates and persuades her to play outside with Mary Ellen, while she takes the opportunity to sneak into the artifacts room. After finding the key hidden in the Warren's home office, she starts tampering with various items, driven by a desire to connect with her deceased father. However, in her carelessness, she accidentally leaves Annabelle's glass case unlocked after hearing a sound she mistakenly believes is her father reaching out.
Soon after, strange occurrences unfold, beginning with a mysterious knock at the door, revealing nothing but emptiness. Spirit manifestations, including Bee Mullins and a series of other malevolent entities like the Ferryman and a Bride, begin to unleash chaos. When Bob arrives and invites Mary Ellen out, he encounters a hellhound, forcing him to seek refuge in the backyard chicken coop. As the night progresses, the situation intensifies with Mary Ellen being dragged away by the Ferryman, and Judy facing Annabelle in her room.
Daniela's attempts to return the key to the artifacts room lead to her entrapment, as she becomes a victim of torment by a cursed monkey toy and an unsettling television that reveals her bloody future. Just as she reaches for a cursed telephone, Judy and Mary Ellen, having evaded the spirits, rush in to save her in the nick of time. To extinguish the disturbance, they realize they must secure Annabelle within her case once more. A confrontation ensues with Daniela being possessed by the Bride, but with a bit of determination and the guidance of Ed's exorcism footage, the girls manage to find and reclaim the doll.
After a series of frantic encounters involving clawing hands from other cursed artifacts, they finally lock Annabelle away, leading to a sudden calm as the restless spirits return to their dormant state. The trio reunites with Bob, who has narrowly escaped the hellhound's wrath.
When Ed and Lorraine return the following day, the young group recounts their harrowing experience. Daniela expresses her remorse to Lorraine, who understands her misguided quest to reconnect with her father. Lorraine presents her with a picture of her dad, which Daniela had once placed in the Mourner's Bracelet. This heartwarming reunion concludes with everyone joining Judy's birthday festivities alongside her friends, marking a return to normalcy after a night of terror.
