Ten-year-old Joey, William Dix, is blamed for the drowning of his younger sister Susy and is sent to a school for emotionally disturbed children. Two years later, he returns home, harboring deep mistrust toward the family's longtime nanny. He believes Nanny, Bette Davis, may have played a part in Susy’s death and now fears she intends to poison him. He refuses to eat the food she prepares, abandons the room she decorated for him, and insists on locking his door and making her promise not to enter the bathroom while he bathes.
Virginia, the mother, Wendy Craig, is emotionally fragile, still mourning Susy. Nanny remains Virginia's main source of comfort, as she had once cared for both Virginia and her sister Pen in childhood. With Bill Fane, James Villiers, away on a Queen's Messenger business trip, Joey is left at home with Virginia and Nanny.
Joey enlists Bobbie, Pamela Franklin, the 14-year-old daughter of the doctor who lives upstairs, to help with a prank: he places her large doll in a running bath to startle Nanny. When Nanny finds the doll, she reacts with visible distress and has to lie down.
Later, Nanny prepares steak and kidney pie. Joey refuses to eat it, suspecting poison, but Virginia accepts a helping and soon falls violently ill. She is hospitalized, and Joey is blamed for the incident. His Aunt Pen, Jill Bennett, weakened by childhood illness, comes to supervise him in Virginia's absence.
During Pen's visit, Joey emerges from the bathroom dripping wet and claims Nanny tried to drown him. Pen dismisses this as fantasy. Later, as Pen becomes short of breath, she asks Nanny for her heart medication. Nanny delays, and Pen's condition worsens.
Joey sneaks up to Bobbie's window and retells what really happened the day Susy died: while Joey played with his father's model trains, Susy went to the bathroom and accidentally fell into the tub while trying to retrieve her doll. Nanny, returning from an appointment, turned on the taps without checking inside. When she later found Susy's body, she bathed it in a dazed state. Joey witnessed this and tried to call for help, but Nanny silenced him and tried to put him in the tub with the corpse. Though Joey escaped, Nanny accused him of being responsible, leading to his institutionalization.
Dr. Medman, Jack Watling, the doctor upstairs, later finds Joey in his apartment and returns him downstairs. That night, Joey barricades himself in his room with a makeshift alarm. Pen wakes up and sees Nanny outside Joey's door with a pillow. Nanny claims it's for Joey, but Pen recalls how Nanny once forbade pillows during their childhood. Realizing Nanny may intend to smother Joey, Pen confronts her. Overcome with emotion, Pen suffers a heart attack. As she lies dying, Nanny withholds her medicine and begins to explain her mental unraveling: she had once been a single mother, and her daughter died from a botched illegal abortion. Returning home from this trauma, she found Susy's body and snapped. Fearing exposure, she rationalized silencing Joey to protect the reputation of nannies everywhere.
After Pen dies, Nanny tries to get into Joey's room. When his alarm alerts him, Joey flees, but Nanny grabs him, knocks him out, and places him in a filling bathtub. However, confronted with the traumatic memory of Susy, she breaks down and pulls Joey from the water.
Later, at the hospital, Dr. Medman informs Virginia that Nanny is mentally ill and will receive long-term psychiatric care. Virginia tells Joey she knows the truth. Joey, no longer withdrawn or fearful, embraces his mother like a normal, happy child.
