Greta, a young woman from Montana, escapes an abusive relationship by getting a temporary job as a nanny for the British Heelshire family. Upon arrival to the United Kingdom and the Heelshire residence, Greta introduces herself to Mr. and Mrs. Heelshire before meeting the elderly couple's young son, Brahms.
To Greta's surprise and amusement, Brahms is a porcelain doll, treated like a living child by his "parents." The real Brahms perished in a fire back in 1991, at the age of eight. Mrs. Heelshire, referring to the porcelain doll, states that Brahms has met "many nannies," all of whom were "rejected." Before the Heelshires leave on holiday, they give Greta a list of rules to follow, warning her that Brahms is not a normal child.
Initially, Greta follows a relatively normal routine, choosing to ignore the rules set in place for Brahms. She regularly calls her sister, Sandy, and befriends the Heelshires' flirtatious grocery boy, Malcolm. Soon after Greta's refusal to follow Brahms' rules, strange things begin to happen—a child's sobs are heard in the hallways, phone calls are cut off and Brahms seems to move on his own, vanishing before reappearing in other sections of the house. After Greta is locked in the attic by an unseen force and served a peanut-butter-and-jelly sandwich outside her door, she begins to believe that Brahms' spirit lives on in the doll. Meanwhile, the Heelshires are seen on a coastline writing a good-bye letter to Brahms and filling their pockets with rocks before committing suicide by drowning.
After Greta demonstrates Brahms' ability to move by himself, Malcolm begins to frequent the house. He informs Greta that the real Brahms was friends with a young girl about his age, who disappeared after a playdate with him in the forest. The girl's body was later found with her skull crushed. Malcolm warns Greta not to stay in the house, but Greta, having previously suffered a miscarriage, feels obligated to care for Brahms and begins to follow his rules. Later in the attic, she finds photos of Brahms with his childhood friend Emily.
One evening, Greta discovers her ex-boyfriend Cole playing snooker in the Heelshires' home. Cole, having tracked Greta, is determined to bring her home, which she refuses to do, making him angry. He becomes even more angered by the appearance of a message written in blood, presuming that Greta wrote it to scare him away. After a brief argument with Greta and Malcolm, Cole loses his temper and smashes the porcelain Brahms, the house begins to shake. An adult human Brahms crawls through a shattered mirror, wearing a mask identical to the doll's face.
Brahms immediately attacks the group, stabbing Cole to death with the shards of the broken porcelain and chasing Greta and Malcolm throughout the house. They eventually escape to the attic where she discovers a room with a mannequin wearing her dress and jewelry. Greta realizes that Brahms has been alive all along, moving the porcelain doll through the house, stealing her possessions, and watching her every move. The Heelshires, presumably held hostage by their son, offered Greta (and the nannies before her) as a form of sacrifice to Brahms for "his keeping". Initially, Greta flees the house at Malcolm's urging, but feels guilty for abandoning him and returns.
Greta uses Brahms' own rules against him when he finds her, demanding that he goes to sleep. After Brahms enters his bed, he tries to pull Greta in for his "good night kiss". As she leans in, Greta stabs him in the stomach with a screwdriver, but this does not kill him. Brahms retaliates by throwing her against a wall then strangling her, Greta then reaches down to the screwdriver (still stuck in his stomach) and twists it in deep causing him to drop her and presumably die. She then escapes, rescuing Malcolm and leaving the Heelshire estate gate open behind her.
The film cuts to a scene of the open gate and then to a hand putting the porcelain doll back together, implying that Brahms is still alive. The film ends with a final glimpse of the repaired doll's eyes.