In 1975, a vampire comes to the small town of Jerusalem's Lot, Maine. He converts some of the people to vampires, and they transform others into vampires, until almost the whole town is undead. Two people eventually kill the head vampire and flee, leaving a town full of vampires behind.

Ben Mears, a writer, goes to Jerusalem's Lot, a small town in Maine. He used to live in 'Salem's Lot when he was a child, and he is going back there now to write a book based on the town. People in the town avoid the "Marsten House" as a man once killed his wife there and then committed suicide there by hanging himself. As a child, Ben once had the frightening experience of going into that house and seeing the ghost of that man. Ben now goes to the Marsten House, but he does not go inside. When he gets there, he meets Susan, and they feel an instant connection, or at least a sense of fate. Ben would like to rent the Marsten House, so he asks if he may, but it has been sold already. So, he moves into Eva Miller's boarding house, instead. Ben and Susan begin dating.

The story flashes back to the previous year, when another newcomer to the town, Richard Straker, makes an offer to buy the "Marsten House" and the old laundromat. He and his business partner, Barlow, buy the properties. They turn the old laundromat into an antique store. Shortly after they arrive, however, odd things start to happen. For instance, the keeper at the graveyard finds a dead dog on the spikes at the top of the graveyard gate. Also, two little boys who are brothers, are walking in the forest to their friend Mark's house, and one goes missing. After the town members conduct a massive search for the boy, they presume him to be dead. His brother, Danny, has a mysterious illness, and he is taken to the hospital. Danny dies not much later, though he appears to be healthy and nobody can explain why he dies.

It turns out that Barlow is a vampire. He has bitten Danny and made him into a vampire. Barlow goes on to feed on many of the town members, and they, in turn, become vampires, too. The new vampires then continue the chain by feeding off from other people, usually their family members and friends, and eventually making them vampires. The people who have been bitten sometimes feel like they are sick for days before they die. They have pale skin and sleep all day. Although they feel terribly hungry, the taste of food makes them vomit. They often have no memory of being in contact with a vampire, or they remember being with a vampire, but they think it was a dream. Many of them just assume that they have the flu. After a few days of feeling sick, they die, and then they are reborn as vampires.

As the story progresses, more of the residents of Salem's Lot become vampires. Many of the people just seem to be "missing." Individuals and entire families are missed by the people who know them in their workplaces, their neighborhoods, their churches, and their schools. Bodies go missing from the morgue. There is no physical proof of what is really going on, though, so most people in the town and in the neighboring towns are simply flustered. They look for non-supernatural explanations for the missing persons and odd occurrences.

Eventually, a coalition forms of people who believe in the vampires. They plot to stop the vampires. The coalition includes Ben Mears, Susan Norton, Mark Petrie, Matt Burke, Jimmy Cody, and Father Callahan. Susan is caught by Barlow and becomes a vampire. Ben later has to drive a stake through her heart. Matt, who is a schoolteacher and a new friend of Ben's, dies from a heart attack. Jimmy Cody, Matt's physician and former student, dies in a booby trap set up by the vampires. Father Callahan is "marked" as Barlow's by being forced to drink Barlow's blood. He escapes by leaving town on a bus. Ben and Mark survive and kill Barlow by driving a stake through his heart. They leave town and end up in Los Zapatos in Mexico. After almost a year, however, they come back to the town during the day when the vampires are sleeping. A draught has made the grass there very dry. Ben deliberately drops a lit cigarette into the grass, where it starts a fire that begins to spread and presumably later consumes the town.