Sally Hardesty (Marilyn Burns) and her brother, Franklin (Paul A. Partain), travel with three friends, Jerry (Allen Danziger), Kirk (William Vail) and Pam (Teri McMinn), to a cemetery containing the grave of the Hardesty's grandfather. They aim to investigate reports of vandalism and corpse-defilement. Afterward, they decide to visit an old Hardesty family homestead, and on the way, the group picks up a hitchhiker (Edwin Neal). The man speaks and acts bizarrely, and then slashes himself and Franklin with a straight razor before the group forces him out of the van. They later stop at a gas station to refuel, but the proprietor (Jim Siedow) tells them that the pumps are empty, and they continue to the homestead, intending to return to the gas station later after a fuel truck makes its delivery. Franklin tells Kirk and Pam about a local swimming hole, and the couple head off to find it. Instead, they stumble upon a nearby house; Kirk calls out asking for gas, while Pam waits on the front steps.
Receiving no answer but finding the door unlocked, Kirk enters the house, where Leatherface (Gunnar Hansen) suddenly appears and kills him. Pam enters soon after, finding the house filled with furniture made from human bones. She attempts to flee, but Leatherface catches her before she can escape, impaling her on a meathook. At sunset, Sally's boyfriend Jerry heads out from the old Hardesty house to look for the others. Finding the couple's blanket outside the house, he investigates and finds Pam still alive inside a freezer. Before he can react, Leatherface appears and murders him, stuffing Pam back inside the freezer afterward.
With darkness falling, Sally and Franklin set out to find their friends. As they near the killer's house, calling for the others, Leatherface lunges out of the darkness and murders Franklin with a chainsaw. Sally escapes to the house, finding the desiccated remains of an elderly couple in an upstairs room. She escapes from Leatherface by jumping through a second floor window and continues to flee, eventually arriving at the gas station. As she reaches it, Leatherface disappears into the night. The proprietor at first calms her with offers of help, then binds her with rope and forces her into his truck. He drives to the house, arriving at the same time as the hitchhiker, who turns out to be Leatherface's younger brother. When the pair bring Sally inside, the hitchhiker recognizes and taunts her.
The men torment the bound and gagged Sally, while Leatherface, now dressed as a woman, serves dinner. Leatherface and the hitchhiker bring an old man from upstairs to the table to join the meal. During the night, they decide Sally should be killed by "Grandpa" (John Dugan), out of respect for his work at the slaughter house when he was younger. "Grandpa" is too weak to hit Sally with a hammer, repeatedly dropping it. In the confusion, Sally breaks free, leaps through a window and escapes from the house, running out onto the road. Leatherface and the hitchhiker give chase, but the hitchhiker is run down and killed by a passing semi-trailer truck. Armed with his chainsaw, Leatherface attacks the truck when the driver stops to help, and is hit in the face with a large wrench wielded by the driver. Sally escapes in the bed of a passing pickup truck as Leatherface waves the chainsaw above his head in frustration.