In 1946, a talented doll maker named Samuel Mullins is deeply engrossed in creating a remarkable new doll, which will eventually be known as Annabelle. During his crafting session, his daughter, Annabelle/"Bee", sends him a heartfelt note asking to play hide-and-seek. Joyfully, Samuel finds her and begins to tickle her, with his wife Esther joining in on the fun. The Mullins family later attends church. While there, a patron inquires about Samuel's next batch of dolls, to which Esther confidently asserts they are ready. However, their joyful outing takes a turn for the tragic when they suffer a flat tire on their way home. As Esther attempts to flag down a passing car, Samuel busily works to change the tire. Unfortunately, Bee, trying to help, is struck by a car, leading to a heartbreaking loss.
Fast forward twelve years to 1958, and we find Sister Charlotte traveling in a van with six orphaned girls: Janice, Linda, Carol, Nancy, Kate, and Tierney. The best friends Janice and Linda arrive at the Mullins' home, which has been opened as a sanctuary for them. Rumor has it that Esther had faced a tragic accident in the years prior, leaving her life shrouded in mystery. Samuel shows Janice a peculiar chairlift designed for Esther's use to help her navigate the stairs.
As the girls explore their new surroundings, Janice’s curiosity leads her to attempt entering Bee's locked room, but Samuel firmly forbids it, insisting it remains locked. The girls soon venture outside to play. Though Linda wants to accompany Janice, unaware of her true needs due to Janice's polio, she reluctantly lets her friend explore alone. Alone, Janice feels a strange presence around her and glimpses something through the mirror, however, nothing is there when she spins around.
That night, in a moment of bravery, Janice sneaks into Bee's room and discovers her forgotten dollhouse, some toys, and a mysterious key leading to a hidden door covered in Bible pages. Inside, she discovers the eerie doll Samuel had crafted many years ago. Disturbed by its presence, she quickly locks the door, but it mysteriously swings open again, prompting her to flee back to her room before Samuel sees her.
During dinner, Carol briefly spots Esther’s silhouette reaching for Samuel and, intrigued, goes on to share ghost stories with Nancy. Their fear escalates when they hear Esther's bell ringing, a signal she uses to summon Samuel. The atmosphere thickens with unease as a mysterious force suddenly grips Carol. In a chilling turn of events, Janice awakens to shadows lurking near her. Her attempt to escape a creeping darkness leads her to the chairlift, but an unseen force pulls her back, lifting her high into the air before dropping her mercilessly onto the floor.
Janice finds herself hospitalized, but after recovery, she returns to the Mullins home. Samuel tends to Esther, hinting at past traumas resurfacing, though Esther calls it merely an accident. The haunting becomes increasingly sinister; Janice encounters the ghost of Bee, who maliciously declares, "YOUR SOUL," and attacks her. Terrified, Linda confides in Samuel about her and Janice's visit to Bee's room, sparking Samuel's outrage upon hearing about the doll.
Samuel finds the doll paradoxically waiting at the dining table with a note reading "Found you." In an unsettling encounter, the specter masquerades as Janice before revealing its horrific true form. Samuel, desperate to protect himself, brandishes a cross only to have the entity brutally break his fingers and end his life. Charlotte discovers Samuel’s lifeless body shortly after.
Desperate for answers, Charlotte confronts Esther, who is horrified upon seeing the doll. Esther reveals the tragic truth: in their despair after Bee's death, she and Samuel welcomed a malevolent spirit into the doll, believing it to be their daughter. Initially, this brought them joy until a horrifying incident left Esther disfigured. She reveals the doll was locked away following a priest's blessing, adding that it is the source of their misfortunes.
As Charlotte prepares to escape with the girls, they realize Janice is missing. Their frantic search leads them to chilling confrontations with the supernatural. The demonic force takes over Janice, violently attacking Charlotte. Carol, trapped outside by a scarecrow, barely escapes. In a desperate move, Linda grabs the cursed doll, and amidst all the chaos, she hurls it down a well. Yet danger looms as they hear ominous noises emanating from the well, connecting them once more to the haunting.
In a final act of heroism, Charlotte confronts the now possessed Janice and finds herself battling the malevolent spirit. As police search the haunted home, they discover only the doll remains in the closet, with Janice having vanished without a trace. As the girls leave the Mullins home, a sense of loss lingers, especially within Linda, who deeply misses her best friend.
Time advances, and we find Pete and Sharon Higgins arriving at an orphanage, where they meet Janice, now introducing herself as Annabelle. Captured by her charm, the couple decides to adopt her, even gifting her a Raggedy Ann doll, reminiscent of the real-life Annabelle.
Fast forward another twelve years to 1970, and the Higgins family is abruptly awakened by strange noises, leading to a horrific encounter where Pete and Sharon meet their end at the hands of Annabelle. As chaos reigns in next door, John and Mia Gordon awaken, unaware of the terror unfolding just beside them.
During the credits, we see Annabelle amidst pages of the Bible, her face eerily turning to watch the audience, while in a scene after the credits, the sinister nun from "The Conjuring 2" appears darkly in Romania, hinting at the horror yet to unfold.
