The film opens on a bizarre Satanic ritual being conducted by a long-haired hippie type named Horace Bones. Nude and freaked out on LSD, Horace and his small group of cohorts are oblivious to the fact that they're being watched by Sylvia, a young girl observing them from the trees. One of the hippies is pregnant and is not taking part in the ritual; she sees Sylvia and drags her into the clearing, where Horace freaks out over the fact that their ritual has been observed. A more recent member of the group, Andy, admits that he met Sylvia in town and invited her along, prompting Horace to violently hit him. Sylvia becomes frightened and runs away, but two other members of the group chase after her and catch her in the woods, where they brutalize her.
The next morning, Sylvia emerges from the woods beaten and apparently raped. She is found by Mildred, the woman who runs the small town's bakery. With Mildred is Pete, Sylvia's younger brother who appears to be about 12 or 13. Together, they take Sylvia back home to where she lives with Pete and their grandfather, Banner. Mildred is sure her boyfriend will know who victimized Sylvia--with the town deserted, the only other people in the area are the construction crew working on a dam near the town. Mildred drives to the dam and informs her boyfriend, who works at the site. He tells her he will look into it.
Meanwhile, Horace and his group have discovered that their van is now broken down and useless. They abandon it in the woods and walk to the town on foot. The first thing they see is the bakery, and Mildred sells them meat pies, throwing in a few extra things as a kindness for them. Horace tells them that he and his friends are rock musicians stranded there, and he asks where they can seek shelter. Mildred explains that Valley Hills only has a few residents, most of them long gone. Only she and a few others remain, awaiting the demolition of the town in the near future. Upon hearing this, Horace and the others move into one of the abandoned houses, smashing things and hunting the many rats inside of it for food.
Pete follows them to the house and witnesses their bizarre behavior. When he returns home, Sylvia has come out of her shock and informed Banner about what happened to her. Pete overhears and reveals that he knows where the hippies are staying. Banner takes a shotgun and sets out for revenge. When Banner encounters the hippies at the house, they disarm him and brutalize him, forcing LSD into his mouth. Pete, who has followed Banner, overhears the incident from outside. Horace apparently wants to kill Banner, as well as Pete, but a female member named Sue-Lin convinces Horace to let them go, fearing intervention by the police.
Banner is tripping when he gets home, and Pete is distressed. Sylvia explains that the hippies dosed him with LSD, and Pete becomes angry. Taking the shotgun, he goes outside the house, but the first thing he encounters is a wild dog that is apparently rabid. Pete kills it and returns later with some of his father's equipment. Using a syringe, he takes infected blood from the dog. The next day, he injects the rabid blood into the meat pies in Mildred's bakery, as a means of getting back at the hippies. Just as Pete planned, the hippies return to the bakery and purchase the meat pies.
Back at their house, Horace and the others eat the meat pies. Andy is the only one who does not partake--he is uneasy about the violence he has witnessed and he wants to disassociate himself from the group, leaving the house. The others begin to show signs of being sick, and eventually they lapse into animalistic behavior. Rollo, a member of the group, takes a dagger and stabs another group member named Roger to death with it. In a feral rage, he rushes out into the yard and finds an axe, returning to chop off Roger's leg with it. Horace also turns violent, grabbing a sword and threatening other members of the group with it.
A female hippie named Molly becomes terrified and rushes off into the night. Construction workers sent there by Mildred's boyfriend find Molly and take her with them. Molly uses her sex appeal to insinuate herself into their group, and she spends the rest of the night having sex with all of them. Finally, Molly begins to freak out, biting one of the men. Two other construction workers are killed when they venture into the house of the hippies and encounter a now-crazed Horace, who hangs one of them and guts the other.
Banner discovers what is going on when Horace attacks Mildred's car and leaves bloody handprints behind. Andy returns to the Banner house and hides out in their barn; after making peace with Sylvia, they are discovered in the barn by Andy, who admits what he's done. Andy explains that he didn't eat the pies, so he is not infected. Banner has informed others about the potential rabies epidemic, and the next day they are joined by Dr. Oakes. Banner, Oakes, and Mildred's boyfriend all discover that the entire construction crew are now rabid maniacs; the entire town is engulfed by them and the hippies, all of them homicidally crazy and prone to mindless acts of violence. Even two seemingly gentle hippie girls, one of them pregnant, happen upon a woman's home. When she takes them in, they wind up cutting off her hand with an electric carving knife. Oakes and the others discover that water terrifies the rabids, and they are nearly killed by a large group of them before they reach a water-filled quarry, which frightens them off.
Andy helps Sylvia and Pete escape after they discover Banner dead in the barn, impaled by a pitchfork. While running through the woods, they happen upon the pregnant hippie, who impales herself on a wooden stake after she learns she has rabies. When they emerge from the woods, they discover Rollo and Horace lurking near the bakery; fortunately they become interested in each other, allowing the normals to escape. Rollo and Horace clash, each of them armed, until Rollo impales Horace with a sword. Andy, Sylvia and Pete discover Mildred barricaded inside the bakery, but she is too afraid to let them inside. When she finally manages to undo the barricade, Andy has been beheaded by a machete-wielding madman. Sylvia and Pete retreat with her to the basement of the bakery, but unfortunately they cannot lock the basement door. A rabid gets inside, and Mildred shoots him in the head. They rush out of the bakery and try to drive away in Mildred's car, but it won't start; the crowd of brawling rabids converge on them and overturn the car. Just then, Oakes arrives with a slew of policemen and medics, and soon all of the rabids have been shot dead. Mildred, Sylvia, and Pete all emerge from the car, shaken but otherwise unharmed.