Three years after the events of the previous film, Laurie Strode (Jamie Lee Curtis) had been sent to a psychiatric hospital after it is revealed that she had beheaded a paramedic instead of her brother Michael Myers (Brad Loree); the paramedic had located the body of Michael in the dining hall of Laurie's school, Hillcrest Academy, after the paramedic tried to grab his mask, Michael attacked him, and crushed his larynx so he wouldn't cry out and forcefully switched clothing and his mask. As Laurie drives the coroner's van out of the school, Myers in the paramedic's clothing walks out of the school grounds and goes into hiding for the next three years.
On October 31, 2001, still in captivity, Laurie, pretending to be heavily medicated, prepares herself for the inevitable confrontation with Michael. Michael appears at the hospital and kills two security guards by decapitating one and slitting the throat of the other before going after Laurie. Laurie lures Michael into a trap, but as she attempts to kill him, she second guesses herself and goes to remove his mask to make sure that it is really her brother this time. Myers takes advantage, and stabs her in the back before sending her off the roof to her death. His mission is complete after more than 20 years of searching and tracking Laurie down.
One year later.
College students Bill Woodlake (Thomas Ian Nicholas), Donna Chang (Daisy McCrackin), Jen Danzig (Katee Sackhoff), Jim Morgan (Luke Kirby), Rudy Grimes (Sean Patrick Thomas), and Sara Moyer (Bianca Kajlich) win a competition to appear on an Internet reality show directed by Freddie Harris (Busta Rhymes) and his friend, Nora Winston (Tyra Banks), in which they have to spend a night in Michael's childhood home in order to figure out what led him to kill. On Halloween, each equipped with head-cameras as well as the cameras laid throughout the house, they start the show, searching the entire house for something that can provide a clue to Michael's past, and decide to separate into three groups to cover more areas. Sara's messaging friend Deckard (Ryan Merriman) watches the broadcast during a Halloween party.
As the group searches the house, Donna and Jim begin getting intimate in the basement. Before anything can happen, a wall filled with corpses falls on them. Initially freaked out, upon closer inspection, Jim realizes the corpses are fake; the whole show is a setup. Jim leaves, but Donna notices a tunnel behind the fallen wall. After following it for a ways, she discovers she is being followed by Michael Myers. Myers chases her through the tunnels before impaling her on a spike on the wall. At the party, Deckard and other partygoers witness the murder. Deckard realizes that the murder was real, but the others believe it is an act.
Meanwhile, Freddie goes through the house dressed as Michael, but is secretly followed by the real Michael Myers. Freddie, mistaking Michael for Charlie (a cameraman who had been killed earlier with a camera tripod leg through his throat), tells him to go to the garage and help Nora out. When Rudy, Sara, and Jim find Freddie in the Myers costume, he reveals the scheme to them and begs them to cooperate, telling them that he's set up a nice payday for all of them when it is done. When he leaves, the trio decides to gather up the other three and leave. But before they can, Jen discovers the body of Bill (who was stabbed in the head and vanished earlier) and is decapitated by the real Michael right in front of Rudy, Sara, and Jim. Rudy and Sara flee, but Jim stays to fend off Myers only to have his head crushed. Michael then kills Rudy by pinning him to the door with kitchen knives before chasing Sara upstairs.
Locking herself in a bedroom, Sara begs for Deckard to help her. The other partiers begin realizing that the deaths have not been staged, and that everyone is, in fact, dead. With Deckard messaging her Myers' location, Sara manages to escape and is found by Freddie. Before they can leave, Michael finds and attacks them. Freddie is injured and Sara makes her way to the tunnels. She finds an exit near Donna's body and emerges in the garage, where she finds Nora dead. As Michael finds her, Freddie returns and begins fighting Michael hand-to-hand. Freddie electrocutes Michael, tangling him up in electrical wiring before carrying Sara out of the burning garage.
Michael's body and the bodies of his victims taken to the morgue. As the medical examiner begins to examine the body, Michael's eyes open.... and the scene cuts to black.