After the confrontation in Hellraiser II, the Cenobite named Pinhead is trapped, along with the puzzle box, amongst the writhing figures and distorted faces etched into the surface of an intricately carved pillar - the Pillar of Souls. The pillar is bought by the rich and spoiled J.P. Monroe (Kevin Bernhardt), owner of a popular nightclub called The Boiler Room. An ambitious young television reporter, Joey Summerskill (Terry Farrell), slowly begins to learn about Pinhead and the mysterious puzzle box. She is introduced to the pain the box can bring when she views a teenage club-goer being ripped apart by the box's chains in a hospital emergency room. She tracks the box and a young woman named Terri (Paula Marshall) to The Boiler Room, from which Terri had stolen the puzzle box.
Through video tape interviews with Kirsty Cotton recovered from the Channard Institute, Joey and Terri learn about the demonic Cenobites and the power of the Lament Configuration, the only means of sending Pinhead back to Hell. Pinhead remains dormant until one night several hooked chains shoot out of the pillar and rip into one of the club goers, Brittany Virtue (Sharon Percival), Monroe had recently slept with. After killing her she is absorbed and her face appears on the pillar. Pinhead convinces Monroe to bring him club members so he can feed on their blood and be freed from the pillar.
Now more dangerous than ever before, since he has been separated from his human self - a World War I British Army officer named Elliot Spencer who takes Joey on a walk round a trench filled with the corpses of what are presumably his men, explaining the nature of himself and Pinhead - and is simply the manifestation of Elliot's dark side and no longer under the control of Hell and purely out to cause chaos and destruction (in the previous movies the Cenobites were creatures of order, not chaos). Pinhead slaughters everybody in The Boiler Room, creating several new Cenobites in the process. Pinhead sets out to destroy the puzzle box so he need never return to Hell again. As time runs short, Joey must think of a plan to bring Pinhead and his newly-created Cenobites back to the realm of Pinhead's human self or else doom both herself and the mortal world to an eternity of pain and suffering.
A young, rich club owner, JP Monroe, stops in an art dealer's shop. As he looks around he notices a large, plaster column with several relief sculptures on it, mostly of humans contorted in pain. Also on the column is a small sculpture of a puzzle box. The owner of the shop approaches him and sells the piece to JP, telling him to "take pleasure in it."
At a hospital emergency room, a young TV reporter, Joey Summerskill, is doing a piece on the abilities of the staff, however, the ER is strangely vacant that night. Suddenly, a man is wheeled inside the ER on a gurney. Sharp hooks at the ends of long, bloody chains are hooked to his body. As he passes Joey, the man whispers, "Help me." A young woman follows after him, hysterically chattering about his condition. Joey interviews her briefly and the woman tells her that she & the man came from a club called The Boiler Room. When the doctors and nurses try to treat him, the chains are suddenly lifted by an unseen force, tearing at his flesh, and the man screams in pain. As the doctors and the young woman watch horrified, his head explodes. Before she leaves, the young lady retrieves a small puzzle box the man had been holding.
Joey is ultimately bored with her job; she's only given puff pieces to report on. She also experiences nightmares about her father, who'd died in the Vietnam War.
She goes to the Boiler Room and asks about Terri. They tell her that she's out with JP at a restaurant. Joey finds JP there & gives him her card, asking to call if he sees Terri. JP tries to hit on her but she rebuffs him. Later, Joey wakes up from another nightmare and receives a phone call from Terri & invites Terri to her apartment. Terri shoes Joey the puzzle box, which allows anyone who solves it to experience a strange realm of Hell. Terri concludes that the man who died in the ER must have stolen the puzzle box from the sculpture JP had recently bought.
At the Boiler Room JP, a self-absorbed and cruel man, examines the sculpture he'd bought. JP finds a hole in the column where the puzzle box had been. JP reaches into the hole and a rat bites him on the hand, drawing blood. JP's blood splatters across the column and is inexplicably absorbed into it. JP is fascinated.