Plot
A dollmaker named Samuel Mullins and his wife Esther grieve for the loss of their seven-year-old daughter Annabelle, nicknamed "Bee", who dies when she accidentally steps in front of a driving car.
Twelve years later, the Mullins open their home to provide shelter for Sister Charlotte and six girls left homeless by the closing of their orphanage. Despite having been warned to avoid Bee's locked bedroom, Janice, a young orphan disabled by polio, discovers a note saying "Find me" and sneaks into the room, which has mysteriously become unlocked. She finds a key for Bee's closet and opens it, where she finds an eerie porcelain doll. This unwittingly releases a powerful demon that begins to terrorize the girls.
One night, the demon, taking Bee's form, appears to Janice, saying it wants her soul. Although she attempts to get away using a stairlift, the demon recalls the stairlift and hurls her violently down to the ground floor, leaving her severely injured and using a wheelchair. With Janice now confined to the first floor, her best friend Linda, now having to sleep alone, is tormented by the demon.
One morning, the demon, posing as Sister Charlotte, wheels Janice into the old barn, where, in the form of Bee, it attacks and possesses her. Linda notices changes in Janice's behavior and tells Samuel that Janice snuck into Bee's room and found the doll. Samuel immediately believes Linda and heads inside, where he comes across a possessed Janice, who is able to walk. Janice transforms and brutally kills Samuel, who follows her while holding a crucifix, forcing him to drop it by breaking his fingers. Outside, Sister Charlotte hears his screams and is horrified to find him dead.
That night, Linda sneaks out and discards Janice's doll into the nearby well. A strange noise comes from the well, and she is almost dragged into it, but Sister Charlotte saves her. Upon heading inside to find Janice missing, Sister Charlotte wakes the orphans, who look for her as Sister Charlotte speaks with the disfigured Esther, who is confined to her bedroom.
Esther reveals that after Bee's death, they prayed to whatever entity would grant their wish to see their daughter again. An unknown entity answered, and though they briefly saw Bee's spirit, it convinced them to transfer its essence into one of Samuel's dolls. They agreed, but soon realized they had attracted a demon looking for a human host. One night, Esther saw Bee's spirit transforming into a demon, which then gouged out her eye. Enlisting the help of priests to bless the house, the couple locked the doll in Bee's closet. Eventually, they opened their house as a shelter for orphan children to repent for their actions, unknowingly giving the demon a chance to look for a human host. The demon then murders Esther and attacks Sister Charlotte. While the orphans leave the house, Linda is trapped and hides in Bee's room, but the possessed Janice finds and tries to kill her. Sister Charlotte arrives, locking Janice and the doll inside the closet, escaping the house.
The next day, police arrive to search the house and only find the doll, which they remove as evidence. Officers escort Sister Charlotte, Linda, and the orphans to find a new home for them. Janice, however, escapes through a hole in the closet wall and relocates to an orphanage in Santa Monica. Still possessed, she becomes reclusive and renames herself "Annabelle". A couple, Pete and Sharon Higgins, soon adopt her.
Twelve years later, after being involved in devil worship, a grown-up Annabelle returns home and murders her adoptive parents at night, awakening neighbor Mia Form, who alerts her husband John of the Higgins's screams.
