Lankester Merrin is a veteran Catholic priest who is on an archeological dig in Iraq. There he finds an amulet which resembles the statue of Pazuzu, a demon who Merrin defeated years ago. Merrin then realizes the demon has returned to seek revenge.
Meanwhile, in Georgetown, actress Chris MacNeil is living on location with her pre-teen daughter Regan (Linda Blair). After playing with a Ouija board Regan begins acting strangely including making mysterious noises, using constant bad language and exhibiting abnormal strength. Regan also causes her bed to shake, much to her and Chris's horror. In response, her mother consults several physicians but despite undergoing a series of diagnostic tests, Dr. Klein and his associates find nothing medically wrong with her.
One night Regan kills Chris's director, Burke Dennings. His murder is investigated by Lieutenant William Kinderman, who interviews Chris as well as priest and psychiatrist Father Damien Karras, who has lost faith in God after his frail mother died.
After the doctors decide that an exorcism may be the only way to help Regan, Chris arranges a meeting with Karras. Karras at first refuses to get permission to perform an exorcism, despite Regan now being completely possessed by the demon. After getting a recording of her talking in reverse and seeing the words "Help Me" on her stomach Karras decides to perform an exorcism. Merrin is selected to do so instead, but Karras is present to assist.
In Regan's bedroom both men try to exorcise the demon but a stubborn Pazuzu toys with them, especially Karras, including insulting his late mother. After a break and hint of faltering, Karras is dismissed. Merrin attempts the exorcism alone. Karras enters the room and discovers Merrin has died and confronts the mocking, laughing spirit of Pazuzu. At Karras' plea, Pazuzu then possesses Karras, leaving Regan's body. In a moment of self-sacrifice, the priest throws himself out of the window before Pazuzu can compel him to harm Regan, and is severely injured.
A few days later Regan, who is now back to her normal self, returns home to Los Angeles with her mother. Kinderman, who narrowly misses them, befriends Father Dyer, an old friend of Karras, as he investigates how Karras died.