In 2022, the United States is a nation reborn ruled by the "New Founding Fathers of America." To maintain low crime and unemployment rates throughout the year, the government has instituted an annual 12-hour period called "The Purge" during which all criminal activity (including murder, theft, rape, etc.) becomes legal. The only rules during The Purge are that "Level 10" government officials must remain unharmed and usage of weaponry above "Class 4" is forbidden. The Purge is designed to act as a catharsis for the American people, so that they may vent all negative emotions however they desire.

James Sandin (Ethan Hawke) is a wealthy salesman who has made a fortune selling home security systems comprising security cameras and metallic walls preventing any possible entrance that are specifically designed for The Purge. One of the neighbors, Grace, tells James's wife Mary (Lena Headey) the neighbors have been gossiping that the extension on the Sandins' house was financed by the security systems James sold them.

At their heavily-fortified house, Mary struggles with their two children, Zoey (Adelaide Kane) and Charlie (Max Burkholder). Zoey is dating an older boy named Henry (Tony Oller) whom Zoey's father doesn't approve of. Zoey goes to her bedroom, where she finds Henry, who snuck into the house before the lockdown. Henry explains to Zoey he wants to convince James to bless their relationship and figured he could not be thrown out of the house during The Purge.

The Purge commences after an emergency broadcast on television. James and his family watch the events of The Purge unfold via the video monitors in the lounge. After a while, Charlie is left alone in the lounge and notices a bloody stranger (Edwin Hodge), outside the house pleading for help. Charlie deactivates the security system and lets him in. James intercepts the stranger and holds him at gunpoint.

Henry appears and opens fire on James, attempting to eliminate the obstacle preventing his relationship with Zoey. James fatally shoots Henry, and in the confusion the stranger escapes to hide within the house. Zoey runs off with the fatally-wounded Henry and watches him die. James then goes off in search of his daughter and the stranger.

Later, a group of masked "Purgers" led by a character known as "Polite Leader" (Rhys Wakefield) arrive at their home, having found where the bloody stranger is hiding. The leader suggests that the family give them the stranger or else they'll kill everyone inside. James admits that the security system was designed to act as a deterrent, but not to withstand any number of types of aggressive assaults.

Charlie finds the stranger and leads him to a secret hiding place. Zoey, seeking to also hide there, inadvertently stumbles into the stranger, who holds her at gunpoint but James pounds a vase on the stranger's head. James and Mary tie up the stranger and, to subdue him, aggravate his wounds, in preparation to deliver him to the attackers.

After seeing James with Zoey, the Bloody Stranger sadly tells James to take him outside. However, the Sandins have a change of heart after realizing they are becoming essentially no different than the purgers outside. The purgers successfully break into the household and the Sandins are forced to defend themselves. One by one, James kills the purgers, but James is stabbed by the leader. Zoey, standing on the staircase, shoots and kills the leader.

Suddenly, the Sandins' neighbors arrive and finish off the remaining purgers. Mary thanks them, but the neighbors reveal that they have come to kill the Sandins: since the opportunity presented itself, they decided it was their patriotic duty to kill the Sandins in order to vent their hatred for the family's new-found wealth. Just as the neighbors are about to kill the family, the Bloody Stranger comes to the Sandins' aid. He kills Mr. Cali (Tom Yi) with his handgun and threatens to kill the remaining neighbors if they don't let the Sandins go, which they do.

Mary decides to spare her neighbors, as too many people have died during the night and to not allow them the pleasure of not having to live with the Sandins. Grace tries to grab Mary's gun to shoot her, but Mary deflects the attack and hits Grace with the butt of her gun and smashes her face into a glass table. The surviving neighbors and the stranger leave the house and walk away as sirens outside start blaring again, signaling the end of the Purge. The Sandin family watches the emergency services arrive outside their home.

During the credits, there is audio from television broadcasts stating that this Purge was the most successful due to the record high number of murders. The broadcast also features analysis and interviews that show growing discontent and shock by the American public at the increasing level of depravity with each subsequent Purge. Despite this, the Purge will recur as normal next year.