In the town of Ogden Marsh, Iowa, David (Timothy Olyphant), the local sheriff enjoys a baseball game. His deputy, Russell (Joe Anderson), spots Rory Hamill (Mike Hickman), a local resident, entering the outfield holding a shotgun. David is forced to shoot and kill the unresponsive Rory. David and his wife Judy (Radha Mitchell), the community doctor, begin to notice other town residents exhibiting bizarre behavior. The next night, a local farmer burns his house down with his wife and son trapped inside, killing them.
While investigating the discovery of a pilot's body in a swamp, David and Russell discover a cargo plane submerged under the water. Communication services are lost, and that evening soldiers wearing hazard materal suits arrive to take all residents to quarantine at the high school. Everyone is examined for symptoms of infection. Judy does not pass the examination and is separated from David. She explains her fever is due to pregnancy, but is sedated anyway. She wakes strapped to a gurney as the perimeter of the facility is breached by the infected. The military personnel evacuate, leaving Judy and others behind. David is nearing evacuation, but escapes and rejoins Russell. They rescue Judy and her medical assistant, Becca (Daniele Panabaker) from an infected citizen whom is killing those in the infirmery.
David, Judy, Russell, and Becca make their way out of town on foot, unable to find a working vehicle. They encounter Becca's boyfriend, Scotty McGregor (Justin Miles), when they pass through his farm. Soldiers raid the farm, shoot Scotty and his mother, and burn the bodies. The group repair a patrol car, and once on the road are spotted by an attack helicopter and drive into a car wash for cover. Infected car wash employees attack and kill Becca, and the helicopter destroys the car.
On foot, Russell disables a passing government SUV with a police spike strip. The driver, presumably a government agent (Glenn Morshower), reveals the cargo plane contained "Trixie," a "Rhabdoviridae prototype" biological weapon which has contaminated the water supply and is very contagious. Enraged, Russell shoots the driver and threatens Judy and David. When confronted about his behavior, Russell realizes he is infected and after being disarmed, begs to go on with Judy and David, later dying while distracting soldiers at a road blockade, so Judy and David can sneak past.
At nightfall, David and Judy arrive at a truck stop to search for a vehicle, discovering the military also executed all those who were evacuated from the town. Fending off three infected people who appear out of nowhere, they escape in a semitruck. Ogden Marsh is destroyed in a huge nuclear explosion as they flee, and their truck flips in the passing shockwave. As the couple walk towards Cedar Rapids, a view from a military satellite highlights the city, and the words "initiate containment protocol" appear, signifying another containment attempt since David and Judy are unknowngly infected by the Trixie virus.
In the closing credits, a news clip from Cedar Rapids Channel 9 is shown in which the newscaster (Bruce Aune) reports that a huge explosion originating from the Dakon Petrol chemical plant started a massive fire in Ogden Marsh, "with eyewitness reports of a 400-foot fireball that lit up the sky." He goes on to report a second explosion at a nearby truck fueling station, alluding to the truck stop. He says a perimeter has been set and civilians are not being allowed into the area. After that, the news clip cuts to a soldier with his rifle brandished, then to a snarling crazy, and finally simply the words "Signal Lost," strongly implying that the much larger city of Cedar Rapids was infected after the events of the film.