In Haddonfield, his niece Jamie Lloyd, has been adopted by the Carruthers family. She has frequent nightmares about Michael, though she does not know who he is. On Halloween night, Jamie goes out trick-or-treating dressed as a clown (a costume that is very similar to the one worn by young Michael Myers at the beginning of the first Halloween film) with her teenage foster sister Rachel Carruthers (played by Ellie Cornell). Her uncle, Michael, follows them.

Dr. Loomis (Having severe facial and bodily scars from burns he received attempting to kill Michael in Halloween II), meanwhile, arrives in Haddonfield after an exhausting journey, and contacts the police department to inform them of Myers’ escape. He and Haddonfield’s new Sheriff Ben Meeker (played by Beau Starr) begin to search the town for Michael and Jamie. They find that Myers has singlehandedly annihilated the entire police force. The girls hide in the Sheriff’s house, where Michael follows them. Michael kills the sheriff’s daughter Kelly by impaling her with the dead deputy’s shotgun, and he kills Rachel’s boyfriend Brady by crushing his cheek bones. Jamie and Rachel escape onto the roof, where Rachel tries to lower Jamie down the chimney, but Myers almost stabs Rachel and she falls off the roof, but hangs onto the rain gutter. When Michael swipes at her with the knife she loses her grip and falls off the roof. Jamie gets down and pleads for Rachel not to be dead. She sees Myers and runs off screaming for help and encounters Loomis. They break into the school, but somehow Myers gets in as well. Myers throws Loomis through the door. Jamie looks around the school for help. She sees Myers again but falls down the stairs and she cannot get up, Myers slowly walks down the stairs to murder his niece. But Rachel is still alive and sprays Michael with the fire extinguisher. They escape and leave Haddonfield but Myers hides in the back of the truck that they use to escape. He murders the men who drive the trucks which forces Rachel to drive. She manages to throw Michael off the truck then she runs him down. The sheriff’s deputies catch up to them and shoot Michael relentlessly. He falls into an abandoned mine shaft which collapses on him.

Back at the Carruthers house, Jamie puts on her clown mask and stabs her foster mother. It turns out that she was possessed by Myers’ rage. Dr. Loomis attempts to shoot her but Sheriff Meeker prevents it. The film ends with a shot of Jamie, wearing the clown mask, holding bloody scissors. This shot is very similar to the shot near the beginning of the original Halloween, where young Michael Myers is seen holding a bloody knife after killing his older sister, Judith.