Will Graham is a former FBI criminal profiler who has retired following a mental breakdown after being attacked by a cannibalistic serial killer, Dr. Hannibal Lecktor, whom he captured. Graham is approached at his Florida home by his former FBI superior Jack Crawford, who is seeking help with a new serial killer case. Promising his wife that he will do nothing more than examine evidence and not risk physical harm, Graham agrees to visit the most recent crime scene in Atlanta, where he tries to enter the mindset of the killer, dubbed the Tooth Fairy by the police for the bite marks left on his victims.
Having found the killer's fingerprints, Graham meets with Crawford, and they are accosted by tabloid journalist Freddy Lounds. Graham pays a visit to Lecktor, a former psychiatrist, in his cell and asks for his insight into the killer's motivations. After a tense conversation, Lecktor agrees to look at the case file. Later, Lecktor obtains Graham's home address by deceit while ostensibly making a phone call to his attorney.
Graham travels to the first crime scene in Birmingham, Alabama. He is contacted by Crawford, who patches Graham through to Frederick Chilton, Lecktor's warden, who has found a note in Lecktor's personal effects. They realize it is from the Tooth Fairy, expressing admiration for Lecktor and an interest in Graham. Crawford brings Graham to the FBI Academy at Quantico, where a missing section of the note is analyzed to determine what Lecktor removed. They discover an instruction to communicate through the personals section of the National Tattler, Lounds' newspaper.
The FBI intends to plant a fake advertisement to replace Lecktor's, but without the proper book code the Tooth Fairy will know it is fake. They let the advertisement run as it is, and Graham organizes an interview with Lounds, giving a false and derogatory profile of the Tooth Fairy to incite him. After a sting operation fails to catch the killer, Lounds is kidnapped by the Tooth Fairy. Lounds is forced to tape-record a statement before being set on fire in a wheelchair, his flaming body rolled into the parking garage of the National Tattler as a warning.
The FBI decodes Lecktor's coded message to the Tooth Fairy: it is Graham's home address with an instruction to kill Graham and his family. Graham rushes home to find his family safe but terrified. After the FBI moves Graham's family to a safe house, he explains to his son Kevin why he retired previously.
At his job in a St. Louis film lab, Francis Dollarhyde—the Tooth Fairy—approaches a blind co-worker, Reba McClane, and offers her a ride home. They go to Dollarhyde's home, where Reba is oblivious to the fact that Dollarhyde is watching home-movie footage of his planned next victims. She kisses him and they have sex. The following night, Graham realizes the Tooth Fairy's murders are driven by a desire for acceptance. Meanwhile, Dollarhyde watches as Reba is escorted home by another co-worker. He murders the man and abducts Reba.
Searching for a connection between the murdered families, Graham realizes that the killer must have seen their home movies; he brought bolt cutters to a home with a padlock in a home video. Graham and Crawford identify the lab in St. Louis where the films were processed. After determining which employees have seen these films, he and Crawford travel with a police escort to Dollarhyde's home. Inside, Dollarhyde prepares to kill Reba with a piece of glass, while police assemble. Seeing that Dollarhyde has someone with him, Graham lunges through a window. He is subdued by Dollarhyde, who retrieves a shotgun and shoots two police officers. Wounded in the firefight, Dollarhyde returns to the kitchen, where he is shot and killed by Graham. Graham, Reba, and Crawford are tended to by paramedics and Graham returns home to his family.
