The villagers of Daggorhorn lead quiet lives except for when the full moon rises. Then they take turns leaving a sacrifice to appease the werewolf that stalks the woods. This uneasy truce was agreed to years earlier in order to keep the beast from killing the people within the town walls.
Valerie has always been different from her older sister, Lucie. Everyone in Daggorhorn loves Lucie’s grace and kindness, while most wonder at Valerie’s free spirit and peculiar ways. While her friends and Lucie all swoon over Henry, the blacksmith’s son, Valerie longs to know what lies outside the village walls.
The girls are excited when harvest time arrives because it means young men from other towns will come to work in the village. Valerie is shocked when her childhood friend Peter is among the workers. Peter had to flee Daggorhorn years earlier when his father was caught stealing and his horse reared and killed Henry’s mother. Valerie is surprised at her attraction to the brooding man she used to know.
Valerie, Lucie and their friends sneak away from their chaperone when they camp out with other villagers to celebrate the harvest. Valerie meets clandestinely with Peter. After a thrilling horseback ride through the forest, he leaves her alone while he returns the horse to its owner.
Valerie sees the full, blood-red moon and hears a terrifying growl in the woods. She flees with the other festival-goers to the village and is assured her sister is safe at a friend’s house. In the morning, Valerie meets again with Peter. He’s learned that she’s been betrothed to Henry.
Valerie is shocked. Before she and Peter can run away together, they hear the church bell toll four times, signaling someone’s death by the werewolf. Valerie follows the villagers to Lucie’s mauled body. While mourners come to grieve with Valerie and her parents, she withdraws into herself, ignoring the sympathy of her betrothed and hoping that Peter will come.
When Peter does arrive, Valerie’s mother convinces him to leave her daughter alone, knowing he will never be able to take care of Valerie like Henry, a wealthy blacksmith, can. Meanwhile Father Auguste, the local priest, sends word to a well-known cleric and werewolf hunter for help, but the men of the village set off to find the beast themselves. Before the night is out, the village reeve has brought home the body of a huge wolf, but not before it killed Henry’s father.
Father Solomon, the werewolf hunter, arrives with his guards to track the beast. He claims that the wolf killed by the Reeve is an ordinary wolf; otherwise it would have turned into its human form come daybreak. The villagers don’t want to believe him and instead plan another festival to celebrate.
During the height of the dancing, Henry and Peter fight over Valerie. She follows Peter to make sure he’s not hurt. He tries to evade her, remembering the promise he made to her mother, but when Valerie confesses her love for him, he whisks her away to the granary. They are interrupted in their tryst by men who need Peter’s help moving a keg.
Before the night is over, the werewolf scales Daggorhorn’s walls and attacks, killing several people. The wolf finds Valerie and her friend Roxanne, trapping them in an alley. Valerie is shocked to discover that she can understand the wolf’s growls. It threatens that it will kill everyone she loves if she doesn’t leave the village with it.
Before it can make good on its threats by killing her friend, they are found by Solomon and one of his bowman. The wolf escapes but promises to return for Valerie before the blood moon wanes. The next morning, Henry confesses he saw Valerie and Peter in the granary. He breaks off their engagement.
The villagers beg Solomon to take on the hunt for the beast. He agrees, but convinces them that the beast is one of them. He and his men investigate the town during the day, looking for people who practice witchcraft or who are in league with the Devil.
They take Claude, the town simpleton, in for questioning, but instead, they torture him, slowly burning him in a metal cage shaped like an elephant. Claude’s sister, Roxanne, tries to save his life by confessing Valerie’s conversation with the wolf. When Valerie admits the story is true, she is thrown into jail and used as bait to bring the wolf into town.
Henry and Peter work together to save the girl they both love. Henry forges an extra set of keys to free Valerie from the chains securing her to an altar in the town center. Solomon captures Peter and throws him into the metal elephant to be dealt with after they’ve killed the wolf. Unable to escape before the wolf or Solomon’s soldiers find them, Valerie and Henry flee toward the sanctuary of the churchyard.
They are stopped by Solomon, who captures Valerie. Once again using her as bait, he hopes to keep the werewolf in town until it can be killed or the sun rises. When an arrow fails to hit the animal, Solomon throws Valerie aside and attacks it himself. The werewolf bites off his hand and continues to stalk Valerie. She agrees to leave with the beast to save her family and friends. But the villagers won’t let her sacrifice herself for them.
One by one they step forward and pledge to defend her. The wolf escapes into the woods before sunrise. Enraged, Solomon attacks Valerie, promising that she will burn as a witch. He is stopped by the captain of the guard, who reminds the cleric that a man bitten by a werewolf under the blood moon is cursed to become one himself. The captain kills Solomon, and Valerie is taken to home to recover.
Valerie seeks out her grandmother, after a disturbing dream in which her grandmother turned into the werewolf. She meets Henry, who has joined the remaining guards to hunt for the monster. Valerie’s feelings for him have changed since he aided her escape, and she finds herself aching for what might have been between them.
He tells her that no one has seen Peter since the werewolf attacked and hints that he believes his rival to be the beast. Henry promises to do what he has to if he finds Peter. Valerie runs through the woods to her grandmother’s house but comes upon Peter instead. Her love for him overcomes her doubts as to whether he is the wolf, and she decides to leave Daggorhorn with him.