Commercial artist David Drayton lives in a lakeside house along with his wife Stephanie and five-year-old son Billy, and their home is partially destroyed one night during a particularly violent thunderstorm, described as the greatest electrical storm in recorded history. A tree smashes through the window of Drayton's room, destroying the paintings which are his work, although luckily the family had taken shelter in their basement.
The morning after, David and Stephanie witness the advance of a thick and unusual mist coming down from the mountains which then begins to speed across the lake. More immediately concerned with cleaning up in the aftermath of the storm, David and neighbor Brent Norton, along with Billy, go to the local grocery store which, like the rest of the community, was left without power. Along the way to the store, however, they see the national guard going toward the mist. While at the store, an increasing amount of police activity in the streets draws the attention of the patrons, as well as the town's civil defense siren sounding the attack signal, culminating with Dan Miller running to the store with a bloody nose warning of something dangerous in the oncoming mist. Seeing the mist roll over the parking lot and hearing the scream of a man who ventures outside, the store patrons heed Miller's advice and seal themselves within the store, which is soon shaken by violent tremors. With visibility reduced to near-zero outside and uncertainty surrounding the fate of the man heard screaming before, a siege mentality takes hold. Unable to convince anyone to escort her back home to her children whom she left alone, a mother of two departs into the mist by herself.
As confusion sets in, religious fanatic Mrs. Carmody suspects the onset of Armageddon as others search for a different answer. While trying to find a blanket for his son in the storeroom, David hears something pushing against the door of the loading dock. Unable to convince local mechanics Myron and Jim of what he witnessed, they and bag-boy Norm open the loading-bay door in an attempt to repair the ailing generator. A set of otherworldly tentacles lined with claws grip Norm, dragging him away before the loading-bay door is closed again. Now aware of the deadly properties of the mist and the danger it poses to everyone in the store, David and assistant manager Ollie Weeks (Toby Jones) try and fail to convince Norton and other skeptical patrons not to go outside. Tying a clothesline around the waist of a man who agrees to retrieve a shotgun from Cornell's car, the rest of the store's patrons are convinced when the man's severed lower body is dragged back within sight of the store.
The patrons prepare to defend themselves by making torches. New creatures appear from the mist at nightfall; enormous flying insects and pterodactyl-like animals that pluck them off of the store windows, eventually breaking one of them and allowing the creatures in. Two people die in the ensuing attack, leaving another badly burned. During the attack, one of the insects lands on Mrs. Carmody, then flies away instead of delivering a fatal sting. Viewing this as validation of her beliefs, Carmody begins quickly gaining followers among the distraught patrons in the belief that the world is ending and human sacrifice is needed to save them from the wrath of God. After Amanda Dumfries (Laurie Holden), who has been looking after Billy, discovers a friend who committed suicide by overdose, Billy makes his father promise that he will not let the monsters catch him. Aware of the growing danger Carmody poses to the group, David turns to thoughts of escape. To test the idea of safely reaching his car, he and a group of volunteers try to retrieve medical supplies for the burn victim from the pharmacy next door, but are attacked by spider-like creatures which claim the lives of two of the volunteers. Seeing the failed expedition, Carmody's following grows stronger, with a visibly shaken Jim becoming one of her most vocal followers.
Billy, who had begged his father not to go out and leave him behind, makes him promise that from now on they will stay together. With the discovery that two soldiers from the Arrowhead Project committed suicide during the expedition's absence, the remaining soldier, Private Wayne Jessup, reveals that the project - rumored to be an attempt to look into other dimensions - was the likely origin of the mist. At Carmody's command, her enraged followers stab the young soldier several times and throw him outside, where he is quickly killed by an enormous, mantis-like creature. While preparing to leave the following morning, David and his group are stopped by Mrs. Carmody, who demands that Billy and Amanda are to be sacrificed. As the crowd advanced to grab Billy and Amanda, Ollie Weeks shoots and kills Mrs. Carmody. With her followers subdued in the wake of her death, an enraged woman calls Ollie a "murderer". The group then proceeds out the front door. Ollie, Myron, and Cornell are killed in the ensuing escape and Bud Brown runs back to the store in a panic, but Amanda, David, Billy, Dan, and Irene make it safely to the car.
Driving through the mist, David returns home to find his wife has fallen victim to the spider-like creatures. Heartbroken, he drives the group south, witnessing the destruction left in the wake of the mist and encountering a tentacled beast towering hundreds of feet high. Eventually, they run out of gas without finding any other survivors. While Billy is sleeping, the four adults accept their fate, deciding that there is no point in going any further. With four bullets left in the gun and five people in the car, David shoots Amanda, Dan, Irene, and his son, Billy, to spare them a more violent death by the creatures. Sobbing, he attempts to shoot himself with the now-empty gun before exiting the vehicle to let the creatures in the mist take him. He hears what sounds like a creature moving toward him, but instead turns out to be a self-propelled gun, followed by a long column of other military vehicles and disembarked soldiers with NBC suits and flamethrowers. As the mist parts, several trucks filled with survivors pass David; among them the mother whom nobody from the store would escort and her two children. Realizing that he had been driving away from help the entire time and that he had just moments ago needlessly shot dead his son and three other innocent people, David falls to his knees screaming whilst two soldiers watch in confusion.
- David Drayton - Thomas Jane
- Mrs Carmody - Marcia Gay Harden
- Amanda - Laurie Holden
- Brent Norton - Andre Braugher
- Ollie Weeks - Toby Jones
- Jim Grondin - William Sadler
- Ambrose Cornell - Buck Taylor
- Dan Miller - Jeffrey DeMunn
- Irene Reppler - Frances Sternhagen
- Billy Drayton - Nathan Gamble
- Sally - Alexa Davalos
- Norm - Chris Owen
- Private Jessup - Sam Witwer
- Bud Brown - Robert C. Treveiler
- Myron - David Jensen
- Terell Jermaine Boyd - Singer