Ashley, Bella Munday, a spoiled child, receives a gleaming new present and discards her old teddy bear. That night, the sentient bear drags her into a closet and rips her eyes out; Ashley's mother discovers the gruesome scene and screams in horror at the sight.
Jack, Karl Holt, a failed toy designer who too often leans on his parents, faces tragedy when they are killed in a freak accident on his 35th birthday. Ten months pass, and he grapples with bills, maintenance, and mortgage while trying to stand on his own. An aggressive estate agent named David Greg Barnet pushes him to sell the house. Jack also views his colleague Richard George Collie as competition after Richard wins Designer of the Year. After a string of failed toy designs, Jack is fired by his boss Ron James Parsons and then rehired for a lower wage, fueling his sense of professional failure.
Determined to grow up, Jack decides to sell his house, start anew, and he even packs away his childhood keepsake Benny, his cherished stuffed bear. Benny, now unleashed, destroys all of Jack’s plush toys and, in a moment of panic, prompts Jack to call two police officers for help. The officers, however, mock Jack and even eat his biscuits, deepening his sense of isolation. At work, Jack meets Dawn, a tech consultant, and the two begin a romance that offers him a fragile light in a bleak period.
Back at home, Jack discovers David’s head on the bed, and the next morning finds David slumped in a chair with blood splashed across the house. He hastily cleans the scene and narrowly avoids capture when the two officers return to retrieve something they left behind. Benny, not content to stay quiet, shreds a cat with a lawnmower, and Jack asks Benny to promise to stay put so long as there is no more killing.
Benny becomes a catalyst for Jack’s renewed ambition, inspiring a stream of toy designs that impress Ron, while his relationship with Dawn grows stronger. A realtor arrives to show Jack’s house to a woman named Tara, but Benny impales the realtor with a wooden sign and forces Tara to hide in Jack’s attic for an extended period. Jack returns home to confront Benny and giữ him contained for a date night with Dawn.
Benny escapes again as Ron drops off Precious, his dog, and Benny kills the dog with a hatchet. Dawn shares a painful memory of her father tripping over her favorite doll, Amy, which results in his death. In a bid to protect Dawn, Jack fakes Precious’ death by stabbing the dog and tossing it out the window onto Ron’s car. The ruse leads Ron to fire Jack, though Benny doesn’t recognize Jack’s anger and continues to press on.
Benny abducts Ron, but Jack seizes the opportunity to win back his job—only Benny kills Ron with a garden tool, and Jack buries Benny in the woods. He and Dawn spend time together while they clean up the murder. Benny, now riding along in Dawn’s car, complicates things as she and Jack try to keep him hidden. When Benny stabs Richard in the hand, a toy named Rosco, previously discarded, drains Richard’s organs, sending shockwaves through the trio.
Jack, Dawn, and Richard escape the house, locking Benny inside, where Benny massacres the remaining workers. They retreat to Jack’s home to formulate a plan, with Richard pessimistic about their chances. Benny arms himself and the house is meticulously booby-trapped. Benny enters the house through the toilet, ambushing Dawn with her childhood doll Amy. Richard is fatally wounded, and Rosco drains his organs as the chaos escalates. Dawn and Jack fight Benny and Amy, ending with Amy being stabbed and Benny leaping from the window, only to be shot to death by the same police officers who previously taunted Jack.
Two months later, Jack and Dawn start a new life, with the two officers covering for them about Benny. Rosco and Ashley’s teddy bear are seen in an alleyway, the bear whispering “You’re Special.” In a post-credits moment, Tara is found dead in the attic, having starved to death while hiding there.
