| Director | Joe Dante |
|---|---|
| Budget | $1 million |
| Box office | $17.9 million |
Karen White is a Los Angeles television news anchor who is being stalked by serial killer Eddie Quist. In cooperation with the police, she takes part in a scheme to capture Eddie by agreeing to meet him in a sleazy porn theater. Eddie forces Karen to watch a video of a young woman being gang raped, and when Karen turns around to see Eddie at his request, she screams. The police enter and shoot Eddie, and although Karen is safe, she suffers amnesia. Her therapist, "Doc" George Waggner, recommends sending her and her husband, Bill Neill, to "the Colony," a secluded resort in the countryside where he sends patients for treatment.
The Colony is filled with strange characters, and one, a sultry witch named Marsha Quist, revealed to be Eddie's sister, tries to seduce Bill. When he resists her unsubtle sexual overtures, he is attacked and bitten on the arm by a wolf while returning to his cabin. After Bill's attack, Karen summons her friend Terry Fisher to the Colony after hearing strange howling at night and Terry connects the resort to Eddie through a sketch he left behind, having previously discovered that Eddie's body disappeared from the morgue. Karen begins to suspect that Bill is hiding a secret marital infidelity. Later that night, Bill meets Marsha at a campfire in the woods and while having sex in the moonlight, they undergo a frightening transformation into werewolves.
While investigating the following day, Terry is attacked by a werewolf in Eddie's cabin, though she escapes after severing the monster's hand with an ax. She runs to Doc's office and calls her boyfriend, Chris Halloran, who has been alerted about the Colony's true nature. While on the phone with Chris, Terry looks for files on Eddie Quist. When she finally finds the file in the filing cabinet, she is attacked by Eddie in werewolf form and is killed. Chris hears the attack on the other end and sets off for the Colony armed with silver bullets.
Karen is confronted by the resurrected Eddie Quist once again, and Eddie transforms himself into a werewolf in front of her. In response, Karen splashes Eddie in the face with corrosive acid and flees. Later, as Chris arrives at the Colony, he is confronted by the disfigured Eddie and his brother, who mock him with Terry's corpse and are fatally shot with silver bullets as they attempt to transform and attack Chris. However, it turns out all the people in the Colony are werewolves and they too begin to transform. Karen and Chris trap the remaining werewolves including a dying Doc, in the barn and burn the Colony to the ground. As they drive away, however one werewolf breaks into their car and bites Karen before being shot by her turning back into Bill as he dies.
Karen resolves to warn the entire world about the existence of werewolves and begins a special worldwide broadcast announcement. Then, to prove her story, she transforms into a werewolf. She is shot at by Chris in front of a live viewing audience, although the people watching the transformation from their television sets around the world are amused, believing it to be just a stunt done with special effects. Marsha, who escaped the Colony herself completely unscathed, sits at a bar with a man who, while watching the special broadcast announcement, orders a pepper steak for himself and a rare hamburger for Marsha after Karen's display cuts to a commercial break.