At the Stephens Sanitarium for the insane, Dr. Stephens pursues a controversial course in which the delusions of the patients are encouraged, hoping they will reach a breaking point at which they will be forced to face reality. The inmates include Sam, a big man made docile by a lobotomy; Sergeant Jaffee, who believes he is still in active combat; Harriett, who fiercely protects her doll as if it were a real baby; Jennifer, who no longer speaks; Allyson King, whose rejection by numerous men has left her desperate for love; Danny, a psychotic; and Oliver W. Cameron, a former judge now barely in control of his violent urges. Nurse Jane St. Claire tends to the deranged inmates, but because there are no locks on any doors and the patients are allowed complete freedom, their erratic behavior soon overwhelms her. Stephens is outside leading Cameron in a therapeutic wood-chopping exercise, and when Jane interrupts to tender her resignation, Cameron attacks Stephens, slashing his head open with the axe. Dr. Geraldine Masters rushes out to help, calming Cameron and promising to take care of “the family” herself. Soon after, Harriett, believing Jane has stolen her baby, chokes the nurse to death. The next day, young psychiatric nurse Charlotte Beale arrives, having been hired by Stephens. Although Masters is suspicious and unwilling to allow the girl to stay, Charlotte explains that, if the sanitarium refuses her a position, she will have to return to her hospital job and inform them of Stephens’ death. Not wanting news of the death to leak out, Masters hires Charlotte and shows her to her room, which is directly next to those of the patients. Immediately, elderly, decrepit patient Mrs. Callingham enters the room and warns Charlotte to flee and never return. The next day, Masters explains the patients’ histories to Charlotte, who is later surprised to discover that Masters has tethered Jennifer to her desk. As Sam wanders the halls telling anyone who will listen that Stephens still speaks to him, Charlotte tries to make a phone call but finds the line dead. The next morning, Charlotte discovers that Mrs. Callingham has cut out her tongue, and although the nurse is alarmed by Masters’ apparent lack of concern, the psychiatrist assures her that Mrs. Callingham has been attended to and now must accept what she has done to herself. Later, phone repairman Ray Daniels arrives, having noticed strange readings on the phone lines. He is first greeted by Cameron and Mrs. Callingham, and unknown to him, narrowly escapes death from Cameron’s axe. Masters reluctantly allows him access to the utility closet, where Allyson aggressively seduces him. Sam is cradling a watch that Danny tries to steal, prompting a fight between the two, while Jennifer attacks Charlotte with a carving knife. Although Masters rescues the nurse, Charlotte weeps and considers leaving, earning Masters’ enmity. Later, Masters finds her office ransacked, and upon spotting one of her files in Jaffee’s room, sets the file on fire and forces Jaffee to hold the burning paper in his palm. The next day, Sam gives the watch to Charlotte, who notices that it bears Stephens’ initials. That night, both Danny and Cameron attack Charlotte but leave before harming her. Sam is cleaning the next day when he finds Ray’s body, while Masters, realizing that some medications are missing, ransacks Jennifer’s room, prompting the girl to commit suicide by stabbing herself in the eye. Upon learning from Sam of Ray’s death, Allyson breaks down in hysterics and informs Charlotte that Masters, on whom she blames the murder, is not a doctor, but an inmate who earlier cut out Mrs. Callingham’s tongue. Horrified, Charlotte asks Mrs. Callingham, who confirms the story. Charlotte turns to Cameron for more proof, but Masters has already told all of the inmates that Charlotte is also a patient, and they now turn against her. Allyson confronts Masters, who, having finally broken down into complete insanity, prepares an injection for the girl, raving that she will save them all. After Danny attacks Charlotte again, the nurse races to Allyson’s room, where she finds the girl in bed with Ray’s decomposing body. Sam approaches Charlotte with a note he declares is from Stephens, but she runs in fear, just as Cameron informs Masters that the “court” has decided she is no longer in charge. Sneaking into the basement, Charlotte is terrified by a hand reaching out for her and attacks, realizing too late that the hand belongs to Stephens, who has been laying injured in the basement but has now died at Charlotte’s hand. Masters orders Sam to drag Charlotte upstairs, and bereft at the sight of his beloved doctor, Sam obeys. When Masters suggests that they lobotomize Charlotte, however, Sam suddenly remembers his own surgery and drags Charlotte to safety. Meanwhile, the other inmates descend on Masters with various weapons, brutally killing her. Sam shows Charlotte a back door, but although she pleads with him to flee with her, he refuses, returning inside. As Charlotte stands outside in the rain, the inmates kill one another, leaving behind only a weeping Sam.