At a graveyard on the outskirts of town, the gravekeeper (Arthur Malet) leads Dr. Loomis to Judith Myers' desecrated gravesite, where they are astounded to find the headstone missing at Row 18, Lot 20. Knowing that Michael Myers as a child murdered his sister, Loomis surmises: "He came home."

When Annie picks Laurie up at 6:30 on their way to babysitting jobs, Laurie tells Annie that she wasn't spooked at the apparition in 87 year-old Mr. Riddle's back yard, but she is definitely nervous about it: "He was watching me." As they drive along and smoke pot, they are followed closely by the tan station wagon, while Annie continues to tease Laurie about her "Girl Scout" interests. When they come upon the scene of a burglary at the town's hardware store, Annie's father (the town's sheriff) reports on what was stolen: "Probably kids...and all they took was some Halloween masks, a rope, and a couple of knives."

After meeting with the Sheriff, Dr. Loomis stands on the sidewalk with his back to the street - as the station wagon cruises behind him and catches up to Annie's car. On the final part of their drive, Annie pries into Laurie's interest in boys, learning that she might ask Ben Traymer for a date: "You know, you could ask somebody...Sure you could. All you have to do is go up to somebody and say, 'You wanna go to the dance?'...Ben Traymer, I knew it! So you do think about things like that, huh Laurie?" From a camera angle inside the station wagon and then from outside after he parks the car, the heavy-breathing killer watches them at their babysitting locations and chooses them as his next victims.

In the meantime, Dr. Loomis is driven by the Sheriff to the Myers house where they find a "still-warm" dog - mutilated and eaten:

Brackett: Every kid in Haddonfield thinks this place is haunted.
Loomis: They may be right. (After noticing something in the beam of the flashlight) Look!
Loomis: What?
Brackett: What is that?
Loomis: It's a dog.
Brackett: It's still warm.
Loomis: He got hungry.
Brackett: ...It coulda been a skunk.
Loomis: Could have, huh?
Brackett: A man wouldn't do that.
Loomis (with gloomy speculation): This isn't a man!

Upstairs in the spooky house, Dr. Loomis describes in explicit detail the evil presence of Michael Myers. He plans to wait for Michael to return:

I met him fifteen years ago. I was told there was nothing left. No reason, no, uh, conscience, no understanding and even the most rudimentary sense of life or death, of good or evil, right or wrong. I met this six year old child with this blank, pale, emotionless face, and the blackest eyes, the devil's eyes. I spent eight years trying to reach him and then another seven trying to keep him locked up because I realized that what was living behind that boy's eyes was purely and simply evil...He's been here once tonight. I think he'll come back. I'm gonna wait for him.

After the scary taunting by his schoolmates during the day, interrupts Laurie's conversation and asks: "What's the boogeyman?" Before she can answer, she is interrupted by a phone call from Annie. They realistically talk like typical teenagers on the phone together about the high school homecoming dance and their dates, while the Wallace's German shepherd dog Lester barks at the unseen figure outside. Tommy goes to the window and sees a black figure outside the Wallace home across the street. He alerts Laurie that: "the boogey man's outside. Look!," but when she looks, the mysterious figure has disappeared. The masked figure has approached closer to the house and peers in at Annie chatting on the phone in the kitchen. From outside the Wallace's house, Lester's loud barking suddenly comes to an abrupt halt.

Together, Laurie and Tommy watch the opening credits of RKO's and Howard Hawks' The Thing (From Another World) (1951) on television [director Carpenter's tribute to the classic science-fiction/horror film about another unstoppable creature-monster, and his own future remake hit The Thing (1982)] during a Halloween-night double-feature, as they talk more about her skepticism of Halloween apparitions in real-life - but she does confirm his worst fear that the 'boogey man' does comes out on Halloween:

Tommy: What about the boogeyman?
Laurie: There's no such thing.
Tommy: Richie said he was coming after me tonight.
Laurie: Do you believe everything Richie tells you?
Tommy: No.
Laurie: On Halloween night, it's when people play tricks on each other. It's all make-believe. I think Richie was just trying to scare you.
Tommy: I saw the boogeyman. I saw him outside.
Laurie: There was nobody outside.
Tommy: There was!
Laurie: What did he look like?
Tommy: The boogeyman.
Laurie: We're not gettin' anywhere. All right, the boogey man can only come out on Halloween night, right?...Well, I'm here tonight and I'm not about to let anything happen to you.
Tommy: Promise?
Laurie: Promise.

In another of the film's more frightening scenes, Annie (having changed into a loose, oversized white shirt) has ventured out to the detached laundry room to wash her own butter-stained clothes. The masked Michael appears outside the door, unbeknownst to her, and then the laundry door swings shut and locks itself. As she struggles to open the locked door and the phone rings incessantly (a call from Annie's boyfriend Paul after his parents have left), the white-masked Shape appears behind her through another window. Lindsay is glued to the TV set, thoroughly engrossed in watching the fictional horror story inside - in the scene where the scientists pace out to the edges of the ice-bound, half-submerged, alien object/saucer or Shape and discover it is a round "flying saucer":

Holy Cats! Hey! It's almost...Yeah...almost a perfect...It is. It's round...We finally got one. We found a flying saucer....Doctor, where do you figure it's from?...I don't know, Mr. Scott...Well, from this planet?...I doubt it... (The announcer: LOCK YOUR DOORS! BOLT YOUR WINDOWS AND TURN OFF THE LIGHTS. DON'T GO AWAY 'CAUSE HERE'S A SCENE FROM... AND NOW THE HORRIFYING CONCLUSION TO THE THING...)

So that Annie can drive over and pick up her boyfriend, she walks Lindsey across the street to join Tommy and put her under Laurie's domestic, baby-sitting care (she's a good-girl "Girl Scout"). Back in the Wallace's garage, Annie finds that the car door is locked, so she goes inside to retrieve the keys. When she gets back to the car, she opens the unlocked door and climbs in - and then suddenly realizes that someone is playing tricks on her with the car door. From behind her in the back seat of the car, Michael brutally strangles her and slits her throat.

Not surprisingly, the second film in the horror night double-feature is Forbidden Planet (1956), a psychosexual science-fiction version of Shakespeare's The Tempest, where space travelers on distant planet Altair-IV are preyed upon by an out-of-control Id Monster. Tommy, who is more interested in watching the real horror story outside the front window, is visibly upset after watching the dark 'boogey man' figure carry a dead body through the Wallace front door. He alerts Laurie but she doesn't believe him: "There's no boogey man, and if you don't stop all this, I'm gonna have to turn off the TV and send you to bed."

Back at the Myers house, Dr. Loomis describes more to the skeptical Sheriff about his years of supervising the maniacal murder Michael, and a possible motive for Michael's murderous rampage:

I watched him for fifteen years, sitting in a room staring at a wall, not seeing the wall, looking past the wall, looking at this night, inhumanly patient, waiting for some secret, silent alarm to trigger him off. Death has come to your little town, Sheriff. You can either ignore it or you can help me to stop it.

As planned, Lynda and her boyfriend Bob (John Michael Graham) drive up to the Wallace's house - they are drinking beer and "totally" excited about an upstairs sexual tryst in the "first bedroom on the left." As Michael carried Annie into the house after her killing, Bob carries Lynda in his arms into the deserted house - anticipating the promise of sex. They make out on the sofa, watched by a black shadow revealed on the left of the frame when the camera pulls back. Glumly, Laurie peers out the venetian blinds at the house across the street, thinking of the fun sexual escapades of her friends: "Everybody's havin' a good time tonight." After calling Laurie and learning that Annie will be returning soon and that Lindsey is "gone for the night," Lynda and Bob proceed upstairs. As Michael's moving shadow appears on the wall behind them while they're making love, a deep chord sounds. When Bob goes to the kitchen to get beer after promising he'll be right back, he hears noises and heavy breathing in a closet. When he opens the closet's door, the masked Michael appears (and stares at Bob quizzically for a moment as he tilts his head), holds him high against the wall, and impales him there with a large, shiny butcher knife.

Wearing a white sheet draped over himself to cover his body - with Bob's glasses perched on his face - the killer stands in the upstairs bedroom doorway and tries to scare Lynda, but ends up fooling her into thinking it is her boyfriend under the sheet. She tantalizes him, while sitting up naked in bed: "See anything you like? What'sa matter? Can't I get your ghost, Bob?" When he won't speak back to her, she gets up and phones Laurie, but before she can say anything, Michael strangles her with the phone cord. Her distress cries sound like the orgiastic moans of a prank phone call from Annie, and Laurie innocently misinterprets her with a macabre question: "Are you fooling around again? Well, I'll kill ya if this is a joke."

Suspicious of what has happened, and not knowing why Annie hasn't returned, Laurie checks on the sleeping children lying side-by-side in bed ("sleep tight, kids"), and then decides to find out what happened across the street. Masterfully, the camera cross-tracks her approach toward the Wallace house. She rings the doorbell and knocks, but no one answers. Finding an open side door, she enters the darkened living room. After a suspenseful climb to the upstairs bedroom door (lit from behind by the orangish glow of a Jack-o-lantern), she discovers the body of Annie. Her friend is lying unceremoniously on a bed with her arms spread out, in front of the tombstone of Michael's dead sister, Judith Myers. As she leaves the room, Bob's body swings down from above and she also finds Lynda's corpse in a closet. The killer had rearranged the bodies of most of his victims within the bedroom where sex had recently occurred.

As a dazed Laurie runs into the hallway, a white mask materializes next to her in the darkness - a truly frightening moment. Wielding a knife, Michael strikes and wounds her on her left arm, sending her headfirst over the stair railing and down the staircase [another Psycho (1960) reference]. Injured by the fall, Laurie is also trapped inside the locked house while struggling to get away. The killer attempts to get through a locked door to attack her - finally using his fist to break down the wooden barrier and unlock it. She breaks the side door's window with her bare hand and escapes from the Wallace residence. Screaming bloody murder for help, Laurie runs next door for help from neighbors, but finds that she is locked outside and the adults inside are too frightened to let her in. As the killer pursues her, she flees across the street for refuge inside the Doyle house where she awakens Tommy to come downstairs and unlock the door: "Tommy, open up, it's me."

The visceral climax is the relentless stalking of a terrified, but resourceful and vigilant Laurie through the Doyle house. Downstairs, she cowers in front of the sofa and begs: "Please stop, please." When Laurie is assaulted by the killer, she strikes him with a long knitting needle in the neck and he falls - she believes she has killed him. She picks up - and then drops - his butcher knife to the floor. (Meanwhile, Dr. Loomis has discovered the institution's station wagon, and has joined the Sheriff to canvass the neighborhood.) Upstairs, after Laurie finds the kids unharmed, Tommy asks about the madman's identity. Laurie reassures them and herself:

Tommy: Was it the boogey man?
Lindsey: I'm scared.
Laurie: There's nothing to be scared of.
Tommy: Are you sure? (She nods.) How?
Laurie: I killed him.
Tommy: You can't kill the boogey man.

Tommy doesn't agree with her - and at that instant, his words are proven to be true. The white-masked, supernatural killer resurrects himself. Fighting for her life in the never-ending struggle, she first conceals the children behind one door and then hides behind some slatted doors in another closet. Michael's pursuit is accompanied by piercing music, quick-cut editing, and real shock and suspense. Camera angles are from the victim's point of view. He bursts through the slats and grabs for her but she fights back by jabbing him through his mask with the sharp end of a metal clothes hanger. Momentarily blinded, he drops his knife again. She grabs for it and then stabs him with it. A second time, the killer lies dead and lifeless, and Laurie non-sensically throws away the knife.

Across the hall, she directs the two children to go down the stairs and run out to a neighbor's house to call the police. Behind her, the presumed-dead, white-masked figure sits up on the floor like a vampirish corpse rising stiffly from death, and he turns his whitish face toward her. The invincible can't be killed - he rises up again and again. Dr. Loomis sees Tommy and Lindsey screaming as they run from the house. As the killer grabs Laurie's neck and strangles her, she brushes the mask from Michael's face - (the only brief glimpse of the killer's face in the entire film and in the entire film series!). [Note: The actor whose face is revealed is not Nick Castle - referred to in the credits as the masked "The Shape", but Tony Moran - listed in the credits as the briefly-unmasked Michael Myers.]

As Michael lets go of her neck to put his mask back on to restore his masked facade, Dr. Loomis rushes up the stairs and finally catches up with his prey. The doctor fires six rounds, emptying his gun into the masked figure. The crazed killer is propelled backwards and falls from the second floor balcony and tumbles to the ground below. Bloodied and in near-shock, Laurie quizzically states:

Laurie: [it]...was the boogey-man.
Dr. Loomis: As a matter of fact, it was.

When Dr. Loomis walks over to look down from the balcony, the camera peers down to view the corpse. Even after being stabbed three times by Laurie (with domestic tools: knitting needle, coat-hanger, and kitchen knife), lethally shot six times, and suffering a second-story fall, the super-human body has vanished into the dark night. The doctor's facial expression denotes an unsurprised look as if he expected or was resigned to the fact that the 'evil' Myers would vanish. Laurie begins crying again, although she is not aware of what Dr. Loomis has just discovered. [No sequel was intended for Halloween. However, the unlikely, cheesy convention of having the enemy resurrect himself in a false climax, termed "The Undead Dead" by Roger Ebert in his Glossary of Movie Terms, could conveniently provide for a sequel.]

There is a final montage of locations in the film where Michael had been hiding or present (and will probably still haunt), accompanied by his heavy breathing - the staircase and living room of the Doyle house, the Wallace house, and the Myers house. Haddonfield has not seen the end of this supernatural, horrifying creature - the embodiment of Evil. He may return on another Halloween night.