Students Mike Tobacco (Grant Cramer) and Debbie Stone (Suzanne Synder), on their first date at "Make-Out" Point, are quite intensely conducting their own anatomical studies when they're distracted by what appears to be a falling star plummeting to Earth. Curious, Mike and Debbie investigate, and after driving to a spot a few miles outside of town, they discover... a weird, glowing circus tent?! Unknowingly, Mike and Debbie have stumbled upon the site of an incredible phenomenon; the "circus tent" is in fact the home of a strange alien breed - killer klowns from outer space. But these clowns are no laughing matter. They are carnivorous, with sharp teeth as a crocodile and they feed on humans They use clown-related items to run after them, for example a pink balloon in the shape of a dog to follow their scent. They kill and "harvest" humans in a kind of pinkish cocoons which are kept in their cave. They shoot the townspeople and they instantly die and appear inside one of those cocoons.
Mike and Debbie tell the police, but they don't believe them. In fact, they get into trouble, especially with Curtis Mooney (John Vernon), the townsherill. He arrests one of the klowns and puts him inside a cell at the police station. The klown proceeds to kill everybody in the cell and uses Mooney's corpse as a kind of vintroluquist's doll in order to scare Dave Hanson (John Allen Nelson), the youngest police officer who has realised that the klowns are a real threat to the town. By shooting the one who kills Mooney, he realises that the only way to destroy them is to shoot their red nose.
The clowns are really interested in getting Debbie alive, so they trap her at her home, and they take her away in a huge balloon. Mike sees it. He and Dave go after the klowns. Mike and Dave rescue Debbie from the yellow balloon and then run down a pole. They reach the main stage. They go up a cake. When there is no way out and they are surrouned by more than 30 klowns, the always-fighting stupid brothers Terenzi, Rich and Paul (Michael Siegel and Peter Licassi) enter the place with the icecream van through a wall. They talk through the microphone and order the klowns to leave Mike, Debbie and Dave alone. This creates confussions among the klowns, who seem petrified.
The biggest klown appears and runs after them, destroying the van. Debbie and Mike leave the amusement park which the klowns have made their home, as the flying saucer is about to leave. Dave is left inside with the two-story tall clown and he's run out of ammunition. The main klowns picks him up and is about to swallow him when Dave uses his police star to tear the klown's red nose, killing him.