At a church in Guatemala, a man and a boy, Ben Mears (David Soul) and Mark Petrie (Lance Kerwin), are filling small bottles with holy water. When one of the bottles begins to emit an eerie supernatural glow, Mears tells Mark that "they've found us again." Knowing an evil presence is nearby, they decide to stay to fight it.
Two years earlier, Mears, a successful author, returns after a long absence to his small hometown of Salem's Lot in Maine in the United States. Mears intends to write a book about the Marsten House, an old, ominous property on a hilltop which has a reputation for being haunted, and attempts to rent it. However, Mears finds that another new arrival in town, the mysterious Richard Straker (James Mason), has recently bought the Marsten House. Straker is also in the process of opening an antique shop with his oft-mentioned but always absent business partner, Kurt Barlow. Meanwhile, Mears moves into a boarding house in town run by Eva Miller (Marie Windsor), and develops a romantic relationship with a local woman, Susan Norton (Bonnie Bedelia). He befriends Susan's father, Dr. Bill Norton (Ed Flanders), and reconnects with his kindly former school teacher, Jason Burke (Lew Ayres). Mears tells Burke that he feels the Marsten House is somehow inherently evil, recalling a traumatic childhood experience which took place inside it.
After a large crate is delivered to the Marsten House one night, an increasing number of townspeople begin to disappear or die under strange circumstances. Mears and Straker are the main suspects as they are both new in town, but it eventually becomes clear that the crate contained Straker's business partner, Kurt Barlow (Reggie Nalder) - an ancient master vampire who has come to Salem's Lot after sending Straker to make way for his arrival. Straker kidnaps a young boy, Ralphie Glick (Ronnie Scribner), as an offering to Barlow, while Barlow himself kills local realtor Larry Crockett (Fred Willard). The Glick boy then returns as a vampire to claim his brother, Danny (Brad Savage), who becomes one as well. In turn, the undead Danny infects a gravedigger, Mike Ryerson (Geoffrey Lewis), then attempts to prey on one of his schoolfriends, Mark Petrie. However, Mark is a horror film buff and manages to repel Danny with a cross.
As the vampirism spreads, Mears, Burke, and Dr. Norton gradually realize what is happening to the town and attempt to stop it. Mears is attacked by Ralph and Danny's presumed-dead mother Marjorie Glick (Clarissa Kaye) after she revives on a mortician's table, but defends himself using a makeshift cross. Mark's parents are both killed by Barlow, though Mark is allowed to escape thanks to some assistance from a local priest. Jason Burke, however, suffers a severe heart attack following an encounter with the newly vampirised Mike Ryerson.
Seeking revenge for his parents' deaths, Mark breaks into the Marsten House, and a concerned Susan follows him inside; both are soon captured by Straker. Later, Mears and Dr. Norton enter the house, too, where Straker kills Norton by impaling him on a pair on antlers before he himself is fatally shot by Mears. Afterwards, Mears and the freed Mark find Barlow's coffin in the cellar and destroy him by driving a stake through his heart. Fleeing the other vampires in the house (the infected townsfolk), the two set fire to the Marsten property as they leave, though Susan is nowhere to be found. While the house burns, the wind carries the fire towards the town itself. As he and Mark drive away from Salem's Lot, Mears comments that the fire is a good thing because it will drive all the vampires from their hiding places and purify the town from the evil that has engulfed it.
The story returns to Mears and Mark at the church in Guatemala two years later. It becomes clear that they are on the run from the surviving Salem's Lot vampires, and that their bottles of holy water glow whenever a vampire is nearby. Realising that they have been tracked down yet again, Mears and Mark return to their lodgings to collect their belongings. Once there, Mears finds Susan lying in his bed. Now a vampire, she prepares to bite him as he leans down to kiss her, but instead Mears drives a stake through her heart and kills her. A grief-stricken Mears then leaves with Mark, knowing that the vampires will continue to pursue them.
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