Jonesy, Beaver, Pete, and Henry are four friends on an annual hunting trip in Maine. As children, they all acquired telepathy which they call "the line". A flashback shows them as they save a mentally handicapped boy named Douglas "Duddits" Cavell from bullies and befriend him.
Jonesy sees Duddits beckoning him to cross the street, but as he does so Jonesy is hit by a car. His injuries heal with mysterious speed and 6 months later he is able to make the group's annual trip. Jonesy meets a man lost in the forest named Rick McCarthy. He is very ill, so Jonesy and Beaver let him rest and recover inside their cabin. Suddenly herds of forest animals flee past their cabin, followed by two military helicopters that announce the area is now quarantined. Jonesy and Beaver return to the cabin to find a trail of blood from the bedroom to the bathroom, where Rick sits semi-catatonic on the toilet, the room covered with blood. Suddenly Rick is thrown from the toilet, dead into the tub as a creature writhes and screams in the toilet. Beaver attempts to trap the creature under the toilet lid, but as he tries to pick up a toothpick, the three-foot long lamprey-like creature, with multiple rows of razor-sharp teeth, breaks out. Beaver fights it but the creature kills him. Jonesy tries to escape but is confronted by a large alien called Mr. Grey, who possesses Jonesy's body and emits a red dust around the entire cabin.
Nearby, Henry and Pete crash their International Scout II SUV to avoid running over a frostbitten woman from Rick's original hunting party. Henry walks for help while Pete stays with the woman. She dies and also excretes a worm, which Pete barely manages to kill. Mr. Grey then tricks and 'kidnaps' Pete, but Jonesy telepathically warns Henry to stay hidden.
Henry returns to the cabin to find Beaver dead and the worm that killed him laying a group of eggs. In order to kill all of the alien larvae, he sets fire to the cabin.
Meanwhile, an elite military unit specializing in extraterrestrials, led by a slightly unhinged Colonel Abraham Curtis, seeks to contain everyone exposed to the aliens, jailing them at a fenced-in concentration-camp. Col. Curtis is planning to retire after this operation and will pass the torch along with a pearl-handled stainless steel .45 pistol to Captain Owen Underhill, his trusted friend and second in command. The two lead a helicopter air-strike into a large forest clearing where the aliens' spaceship has crash-landed. The aliens use telepathy to distract the pilots, but the four Apaches and Curtis' Little Bird massacre most of the aliens with mini-guns and missiles. The alien ship then self-destructs destroying the remaining aliens and two helicopters.
Jonesy, conscious within his mind, retraces his memories of the area while watching Mr. Grey use his body. Mr. Grey tries to coerce Pete into cooperating, but bites him in half when he refuses. Jonesy realizes that Mr. Grey possessed him, not by chance, but to access past memories of Duddits which he needs. Jonesy locks his memories in a "mental warehouse", to deny Mr. Grey the knowledge he seeks.
Henry arrives at the fenced-in camp only to realize that Col. Curtis plans to kill all of those quarantined. Henry is able to learn that Underhill is aware that Curtis has gone insane and plans to call in an Army general to relieve Curtis of command. Henry convinces Underhill to help him escape to go after Jonesey and Mr. Gray while the Army forces shut down Curtis' operation.
Needing help, Henry seeks out the help of Duddits only to learn that his old friend is dying of leukemia. Duddits agrees to help them and points Henry to the Quabbin Reservoir, which serves Boston, where Mr. Grey has gone to seed the water with alien larva.
Col. Curtis, realizing the danger that still looms to the entire planet, leaves the camp in his armed Little Bird and tracks down Henry, Cpt. Underhill and Duddits, via a micro-chip in the gifted .45 pistol. At the reservoir, Owen Underhill is strafed by Curtis' helicopter and mortally wounded, but not before he shoots Curtis down.
In the reservoir's pump-house, Henry uses Underhill's machine-gun to kill Mr. Grey's first worm, but cannot decide if Jonesy is possessed. Duddits confronts Mr. Grey, who finally exits Jonesy's body. The two struggle as Duddits reveals himself to be a different race of alien. Duddits is mortally wounded in the resulting fight but manages to kill Mr. Grey by self-destructing, turning both aliens into a cloud of red-dust which briefly resembles a dreamcatcher. Jonesy, now himself again, steps on the final larva-worm before it can escape and contaminate the reservoir.
- Morgan Freeman as Colonel Abraham Curtis
- Thomas Jane as Henry Devlin
- Mikey Holekamp as young Henry
- Jason Lee as Joe "Beaver" Clarendon
- Reece Thompson as young Beaver
- Damian Lewis as Gary "Jonesy" Jones / Mr. Gray
- Giacomo Baessato as young Jonesy
- Timothy Olyphant as Pete Moore
- Joel Palmer as young Pete
- Tom Sizemore as Owen Underhill
- Donnie Wahlberg as Douglas "Duddits" Cavell
- Andrew Robb / Tyler Myer as young Duddits
- Eric Keenleyside as Rick McCarthy
- Rosemary Dunsmore as Roberta Cavell
- Michael O'Neill as General Matheson
- Darrin Klimek as Maples
- Campbell Lane as Old Man Gosselin
- C. Ernst Harth as Barry Neiman
- Ingrid Kavelaars as Trish