Will Randall (Jack Nicholson), an editor-in-chief of a large, New York City publishing house, is driving home to Manhattan from Vermont on a cold March night. The road is quite dark and icy and he hits a large wolf with his car. While he inspects the wolf's body and tries to drag it off the road, the uninjured wolf, playing dead, suddenly bites him and trots off. Will walks slowly back to his car, noticing that several other wolves are watching him in the woods nearby, their yellow eyes glowing in the dark. Will makes it back home to his penthouse and his wife, Charlotte. He ends up sleeping for some 20 hours, waking up only when Charlotte comes home in the evening. They have dinner together and Will becomes very passionate with her, to her sly delight. When he returns to his office, he notices that his sense of smell is greatly enhanced; he can smell tequila on a coworker's breath as he passes him and hear every conversation going on among the office's other employees. Will is also able to edit a manuscript quickly and without his glasses. Will's new boss, Raymond Alden (Christopher Plummer), a rich tycoon who has bought the publishing house, throws a lavish dinner party at his Long Island estate. He tells Will that he's demoted as chief editor and his replacement will be Will's protégé, Stewart Swinton (James Spader). Raymond offers Will a job as editor in Easter Europe. While stalking away from the meeting with Raymond, Will gets too close to a few prized horses Raymond is showing and they become spooked. Will also feels pain in his chest like a heart attack and is forced to sit down near a guest house. While he recovers, he meets Alden's headstrong daughter Laura (Michelle Pfeiffer), who is polite but sullen and withdrawn. She comforts him with a glass of liquor and firmly rebuffs Will's advances. Will rejoins Charlotte and Stewart and genially congratulates the latter on his promotion. Stewart, feigning incredulity, claims he had no knowledge of Raymond's decision until right before the party. Will and Charlotte drive home, both seething over the turn of events. At home later, with Charlotte out of town for work, Will takes several deep sniffs of a robe. He becomes very agitated and goes to Stewart's apartment. Steward lets Will in the building, tries to grab him to talk to reason with him and Will bites him viciously on the arm. Will jumps up the grand staircase to Stewart's apartment with seemingly superhuman agility and finds Charlotte there. Will stalks off without another word, leaving his wife unharmed. Will checks into Manhattan's Mayflower Hotel. The next day he consults his secretary Mary (Eileen Atkins) and his assistant Roy (David Hyde Pierce) and plots to draw his and Roy's clients into a new firm with new investors, a move that Will hasn't backed up with a shred of truth, much to the admiration of Mary and Roy. Will drives out to Raymond's estate again to tell him he's turning down the position in Eastern Europe. While leaving, Will sees Laura again, riding a horse nearby. The horse is spooked when it sees Will and throws Laura off. Raymond suddenly appears and, upon finding out that Laura is unharmed, takes another opportunity to slag Will, saying that he doesn't approve of Laura getting involved with Will. She turns down her father's offer of lunch and takes Will back to the guest house she's staying in. The two talk over peanut butter and jelly and wander around the estate. Will tells her about his encounter with the wolf and how he believes he might be becoming one. He feels sick again and lays down in her house while she tends to him. During the night he wakes up, clearly showing characteristics of a wolf and bounds out, hunting down a deer and killing it. In the morning Will finds himself on the bank of a stream, with blood all over his face and hands. He leaves immediately and sees his doctor, who tells him he's fine. Laura, believing Will had left her cold, refuses to take Will's calls. Will visits Dr. Vijav Alezais (Om Puri), a professor specializing in the supernatural. Alezais tells him that the wolf that bit Will was not a true werewolf but a demon wolf that simply passes the spirit of an animal on to it's victims. He also suggests that this spirit can be transmitted to another person simply through passion and that not all wolf spirits are evil, they are manipulated by the nature of the individual. The professor gives Will an amulet to protect him from turning completely into a wolf. Alezais also asks Will to bite him, as Alezais does not have long to live, and would prefer "demonization to death." After refusing, Randall keeps the amulet so that he won't transform at the next full moon. Calling Laura to explain, Randall, now a wolf, breaks into the Central Park Zoo and steals handcuffs from a policeman (David Schwimmer) who tries to arrest him. In another area of the park, muggers want his wallet, but he attacks and leaves one of them alive. He wakes up in his hotel, with no memory of what happened. Will outmanoeuvres Raymond and Stewart with his threat of stealing the publishing house's biggest authors. He finagles a new contract that will let him stay editor-in-chief and grant him a larger salary and greater authority. Raymond also grants him the opportunity to fire Stewart. The two meet in the men's room and although Stewart begs Will for a second chance, Will still fires him, urinating on his shoes. While washing his hands, he finds fingers in his handkerchief and realizes he killed someone, at least one of the muggers in Central Park. Will's biting of Steward when he discovered his affair with Charlotte has consequences. Stewart attacks and kills Charlotte and sets about framing Will for the murder. Will, who believes he's become too dangerous, handcuffs himself to the radiator in his hotel room and waits for Laura to arrive. She frees him against his objections and Will finally puts on the amulet Alezais had given him. The two spend the night together, having sex. The next day they both hear about Charlotte's murder and Will insists Laura take him to her father's estate and lock him in the horse stables. Laura gets a call from a Detective (Richard Jenkins), the chief investigator of Charlotte's death. He tells her that canine DNA was found on Charlotte's body. Alarmed, Laura goes to the police station. There she runs into Stewart, who makes an animal-like pass at her. Laura hurries away, making arrangements for her and Will to leave the country. Stewart follows her, viciously kills the two security guards on the property and attacks Laura, trying to rape her in front of Will in the stables. Will tears off the amulet, succumbs to the full power of the wolf and escapes confinement, attacking Stewart. The two fight ferociously until Stewart is shot to death by Laura when he tries to stab Will with a pair of garden shears. Will and Laura stare at each other, Will is frightened to touch her due his monstrous state. She looks at him with a loving glance and takes his hand but he still runs off, hiding in the woods where he makes a final transformation. Later, Jenkins arrives. Laura shows heightened senses while talking to the detective and the police that accompanied him, telling the detective that she can smell vodka on his breath. The final scene is a close-up of her face fading into dark, lupine eyes, and a close up of Will completing his transformation into a full werewolf.
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