Recently divorced Meg Altman (Jodie Foster) and her 11-year-old daughter Sarah (Kristen Stewart) have just taken possession of a four-story brownstone on New York City's Upper West Side. The previous owner, a reclusive millionaire, had custom-built a fortified "panic room" as a sanctuary, offering protection against potential intruders. This room is secured with robust concrete and steel, a heavy steel door, an intricate security system comprising multiple surveillance cameras, and a dedicated phone line.
On the very night of their move, the tranquility is shattered when the house is invaded by Junior (Leto), the grandson of the late owner; Burnham (Whitaker), an employee of the home's security company; and Raoul (Yoakam), a gunman hired by Junior. Their motive is straightforward yet ominous: they want to seize $3 million in bearer bonds, securely locked away in a floor safe located in the panic room.
Upon realizing that Meg and Sarah are already inside the house, Junior persuades a hesitant Burnham, who had assumed the premises were vacant, to go ahead with the robbery. As they execute their plans, Meg wakes up to see the intruders via the panic room's video monitors. Acting swiftly, she grabs Sarah and they rush into the panic room, sealing themselves inside, only to discover that the phone line is dead.
In a desperate bid to force them out, Burnham starts pumping propane gas into the panic room's air vents. Tensions escalate as Raoul, in conflict with Junior and Burnham, recklessly increases the gas levels. In a moment of desperation, Meg ignites the gas while taking cover with Sarah under fireproof blankets—this act of bravery leads to a violent explosion that vents into the outside area, injuring Junior in the process.
The Altmans attempt multiple methods to call for help, including signaling a neighbor with a flashlight through a ventilation pipe, but their cries for assistance go ignored. Meg manages to tap into the main telephone line and contacts her ex-husband Stephen (Bauchau) just before the burglars sever the connection.
As attempts to retrieve the mother and daughter fail, Junior inadvertently reveals that the safe contains much more money than he initially disclosed and decides to abandon the heist. Unfortunately, before he can leave, he is shot by Raoul, who then forces Burnham, under duress, to continue the robbery. Chaos ensues when Stephen comes to the house, only to find himself held hostage and brutally beaten by Burnham and Raoul. Compounding the crisis, Sarah, who is diabetic, suffers a seizure, and her emergency Glucagon syringe is left outside the panic room in a refrigerator.
Utilizing Stephen's unconscious state, Burnham tricks Meg into briefly leaving the panic room, seizing the opportunity to enter and discover Sarah lying motionless. In a tense moment, Meg fights against Raoul to retrieve the syringe, ultimately hurling it into the panic room just in time. Burnham, who has shown some signs of compassion, reluctantly administers the injection to Sarah, confessing that he only took part in the robbery to ensure a better life for his own child. "I didn’t want this," he tells her, and after administering the medication, he reassures Meg that Sarah is now out of danger.
When two police officers, alerted by Stephen's call, arrive on the scene, Raoul threatens to kill Sarah. Racing against time, Meg deceives the officers into leaving, fearing for her daughter's safety. Meanwhile, Burnham breaks open the safe and retrieves an astonishing $22 million in bearer bonds. As the robbers attempt their escape while holding Sarah hostage, Meg bravely strikes Raoul with a sledgehammer, giving Burnham a moment to flee. In a twist of fate, after hearing Stephen's cries for help, Burnham rushes back just in time to confront Raoul, shooting him in a bid to protect Meg and Sarah and uttering the words, "You'll be okay now."
With the police now alerted to the unfolding crisis, they storm the house and apprehend Burnham, who chooses to let the bearer bonds float away in the wind, a symbolic gesture of his newfound resolve. In the aftermath of this harrowing ordeal, Meg and Sarah emerge stronger, beginning a search through the newspapers for a new place to call home, ready to leave the trauma behind.
