Plot:
An unhappy Valerie plans to run away with Peter, but their plans are put on hold when the town sirens erupt, telling the couple that the werewolf who terrorizes their village has struck again. On closer inspection of the victim, it is found to be Lucy, Valerie's older sister. The townspeople offer a monthly sacrifice to the beast and stay away from the woods but Lucy ventured there after discovering that Valerie had been promised an engagement to Henry, whom Lucy loves.
Adrian, Henry, Peter, Cesaire, and the other men venture out into the woods to hunt the Wolf and manage to behead one, but it kills Adrian in the process. The men bring back a common gray wolf, thinking it is the one that has been terrorizing the village.
While helping Suzette embalm Adrian's body, Valerie discovers that they once had an affair and that Lucy is actually his daughter as well as Henry's half-sister. This is the reason why she could not be offered to him. Valerie also learns that Cesaire is seemingly unaware of this.
The townspeople decide to celebrate the death of the wolf, but their festivities are interrupted by the arrival of famous
witch hunter Father Solomon (
Gary Oldman) who reveals that the townspeople did not slaughter the real Wolf because it would have changed back into its human form if they did. He then explains that since the Wolf can be wounded by objects made of
silver, he has covered the fingernails of one of his hands with it.
Still, the townspeople decide to continue the celebration. But the festivities are once again interrupted by the arrival of the real Wolf, who in a rampage kills several people. It is revealed that those bitten by the creature during the week of a blood moon shall receive the curse as well. Valerie and her friend Roxanne (
Shauna Kain) are cornered by the Wolf while attempting to get to the church, as the holy ground is a place of safety. The Wolf then begins speaking to Valerie in growls that she can understand (much to her surprise) in addition to having very brown eyes. When the two arrive back at the village it is shown that one of Father Solomon's guard is still alive, though he has been bitten by the Wolf. Despite the guard's brother's protest, Father Solomon kills the guard in an attempt to save the town from yet another werewolf.
The following day, Roxanne's
autistic brother is arrested by Father Solomon, who believes him to be an accomplice of the Wolf due to the frantic state in which he was found after the attack. It is shown that Roxanne's brother is put in to a large metal elephant with a fire burning underneath it - resembling a furnace. For her brother's release Roxanne tells Father Solomon that Valerie can communicate with the Wolf. When later led to her brother, she sees he has already died from the metal elephant. Meanwhile Father Solomon captures Valerie and uses her as a bait to lure the Wolf out of hiding, but she is rescued by Peter and Henry. While Henry frees Valerie's arms from some chains, Peter sets afire the tower from which Father Solomon is overseeing the action. In the act Peter is caught and thrown into the elephant, though the fire is not lit underneath it. Father Solomon's men attempt to shoot at Valerie and Henry, and, in the ensuing mayhem, the Wolf appears, killing many more and following Valerie to the church, where it burns its paw upon entering. Father Solomon attempts to kill the Wolf, but has his hand bitten off. Valerie's friend Roxanne and others shield her from the wolf until the sun rises. Having been bitten, Father Solomon is executed. Meanwhile, Valerie becomes convinced that her Grandmother (
Julie Christie) who lives in a cabin in the woods and also has very brown eyes, is the Wolf and sets to destroy her and save the village.
Valerie sets off for her grandmother's house, stopping at the chapel on her way out of the village, and putting Father Solomon's severed hand in her basket. In the woods Valerie meets Peter, who is wearing a glove. He does not explain how he was able to get out of the elephant, but believing him to be the Wolf attempting to hide his burned paw, Valerie slashes him with a knife. She flees to her grandmother's house. When she arrives, it seems as though her grandmother is acting strangely and will not reveal herself to Valerie. It is then revealed that the Wolf was neither Peter nor Valerie's grandmother, but Cesaire as he pulls back the curtains, also showing himself to have been faking her grandmother's voice. Cesaire explains to Valerie that he needs someone to pass his gift onto, as the blood moon is almost over. He explains he originally intended for it to be Lucy, however once she saw him, she remained frightened; revealing that she could not understand him. Any offspring of a Wolf would have been able to understand its language. Upon this revelation, Cesaire acted out of rage and killed Lucy. (This also explains why the wolf clawed Valerie's mother and murdered Adrian.)
As Cesaire is about to bite Valerie, Peter suddenly arrives to save her. Cesaire bites Peter before being killed as Valerie stabs him with the silver fingernails of Father Solomon's severed hand, and as Peter throws his axe into Cesaire's back. Valerie and Peter dispose of Cesaire's body by filling him with rocks and dumping him into the water.
Valerie chooses to remain living in her grandmother's house. She intends to wait for Peter, who, fully aware that he is cursed, retreats to the wilderness in order to learn how to control his power. Much later, as Valerie picks some plants, she hears a sound. Looking up, she sees the Wolf. She smiles as they reunite.
