Benjamin Barker (Johnny Depp), a skilled barber, is falsely charged and sentenced to a life of hard labor in Australia by the corrupt Judge Turpin (Alan Rickman), who lusts after Barker's wife Lucy (Laura Michelle Kelly). Now under the assumed name "Sweeney Todd", Barker returns to London with sailor Anthony Hope (Jamie Campbell Bower). At his old Fleet Street lodgings above Mrs. Nellie Lovett's (Helena Bonham Carter) pie shop, he discovers that Lucy, having been raped by Turpin, has poisoned herself, and his teenage daughter Johanna (Jayne Wisener) is now Turpin's ward, and like her mother before her, is the object of his unwanted affections. Nellie has kept Todd's silver barber knives hidden in the Barkers' old room, which is supposedly haunted. Todd vows revenge, reopening his barber shop in the upstairs flat.
While roaming London, Anthony spots Johanna and falls in love with her, but is ejected from the Judge's house by Turpin and his associate, Beadle Bamford (Timothy Spall). Far from being discouraged, the sailor becomes determined that the pair will elope. Meanwhile, Todd, during a visit to the marketplace, denounces a fraudulent hair tonic by faux-Italian barber Adolfo Pirelli (Sacha Baron Cohen), and later humiliates him in a public shaving contest. Pirelli and his boy assistant Toby (Ed Sanders) visit Todd's barbershop; Lovett keeps Toby occupied downstairs, while in the parlor Pirelli reveals himself to be Todd's former assistant and attempts to blackmail him into paying him half of Todd's earnings or he will reveal Todd's real identity. Instead of giving Pirelli a pay off Todd murders him to protect the secret of his true identity.
Turpin, intending to propose to Johanna, pays a visit to Todd's parlor to groom himself into Johanna's ideal suitor. Recognizing his tormentor, Todd relaxes the judge while preparing to slit his throat. Before he can do so, they are interrupted by Anthony, who, unaware of Turpin's presence, bursts in and reveals his plan to elope with Johanna. Turpin leaves enraged, vowing to never return. His plan thwarted, Todd has an epiphany, and decides to vent his murderous rage upon his customers while waiting for another chance to kill Turpin. He is indiscriminate about his victims he believes that he is punishing the corrupt aristocracy for their exploitation of those below them and, at the same time, saving the lower classes from their misery.
Lovett becomes his willing accomplice, suggesting they dispose of the bodies by baking them into pies to improve her business. Todd enthusiastically agrees, and rigs his barber's chair with a pedal-operated mechanism, which deposits his victims through a trap door into Lovett's bakehouse. As the weeks pass, Todd's murders accumulate (although he is shown sparing a man who brings his wife and daughter). Meanwhile, Anthony begins to search for Johanna, who was sent by Turpin to Fogg's insane asylum as punishment for her refusal to marry him.
The barbering and pie-making business prospers financially, and Lovett takes in young Toby. Anthony finally discovers Johanna's whereabouts and, following Todd's plan, poses as a wig-maker's apprentice, allowing him access to the asylum to put a rescue plan into action. As Anthony is given a short tour of the asylum, he becomes aware that his guide has been using the female inmates for his own profit; after freeing Johanna, he chooses to lock the guide in with the inmates, who fall upon him with murderous intent. Todd's motive for assisting is to lure Turpin back to the barber shop, and he sends Toby to the courthouse to let the judge know where he will find Johanna. Toby has become wary of Todd, and when he returns he tells Lovett of his distrust, unaware of her complicity in his crimes. He promises to protect Mrs. Lovett, whom he has come to love as a surrogate mother. Beadle Bamford arrives at the barber shop and is murdered by Todd, and Lovett informs Todd of Toby's suspicions. The pair search for Toby, whom Lovett has locked in the basement bakehouse to keep him out of the way. He is nowhere to be found, having hidden in the sewers after seeing the Beadle's body drop into the room from the trapdoor above, as well as finding fingers in a pie, clothing and body parts in a fireplace. Meanwhile, Anthony brings a disguised Johanna to the shop, where she hides herself in a trunk in a corner of the room.
An insane beggar woman who has been pestering Todd, Lovett and Anthony throughout the film now makes her way into the shop. As Todd enters, she claims that she recognizes him. Just then, Turpin's voice is heard. Todd quickly slits the beggar woman's throat and deposits her body through the trap door. As Turpin enters, Todd lies to him that Johanna had repented, and offers a free shave. Todd then reveals his true identity and stabs Turpin in the neck numerous times before finally slitting his throat and dropping him through the trap door. As Johanna peeks out of the trunk, Todd spots her and prepares to slit her throat as well, not recognizing her as his daughter. A scream from Lovett diverts him to the basement, where she tells him that Turpin had still been alive and tried to grab at her dress before bleeding to death. Viewing the corpses in the light of the bakehouse fire, Todd discovers that the beggar woman was his wife, Lucy, whom he had believed to be dead based on Lovett's account of the poisoning. Todd realizes that Lovett knew Lucy was alive. Lovett points out that she never said Lucy died; and, after attempting to convince Sweeney that she misled him for his own good, she confesses she lied because she loves him and would be a better wife than Lucy ever was. Todd forgives her, waltzing maniacally with her around the bakehouse before hurling her into the open oven. He watches her burn as he shuts the oven door and locks it. He returns to Lucy and cradles her dead body as Toby emerges from the sewer, picks up the discarded razor, sneaks up behind the barber, and slits Todd's throat (Todd appears to hear him, but he simply raises his neck, and allows Toby to kill him.) The film ends with Todd bleeding over his dead wife as Toby walks away.