In Northern Iraq during an archeological dig, archeologist and priest Father Lankester Merrin (Max von Sydow) discovers a small amulet, and after studying it discovers it resembles a statue of Pazuzu, a monstrous demon in the form of a man, falcon, serpent and lion. Merrin suspects Pazuzu, whom he defeated many years ago, will return.
In Georgetown, Washington D.C., actress Chris McNeil (Ellen Burstyn) begins noticing strange and frightening behavioral changes in her daughter Regan (Linda Blair) such as constant swearing and abnormal strength. When medicine fails, Regan is given a few unpleasant tests, but X-ray results prove "negative" much to the confusion of the doctors. In reality, Regan is now possessed because of a Ouija board by Pazuzu, who pretended to be her imaginary friend "Captain Howdy."
Burke Dennings (Jack McGowran), Chris's British director, dies mysteriously after falling from Regan's open bedroom window while Chris' secretary Sharon Spencer (Kitty Winn) was out. His murder is investigated by detective William Kinderman (Lee J. Cobb), who questions both Chris and a young priest named Damien Karras (Jason Miller) who has lost faith in God after the death of his ill and elderly Greek mother, with only Chris suspecting Regan.
After Regan assaults a psychiatrist, the doctors finally decide an exorcism may be Regan's only hope. Chris, however, is tentative as she and Regan have no religious beliefs.
Karras agrees to see Regan for Chris but refuses to perform an exorcism; however, further supernatural phenomena force him to accept Regan needs an exorcism. Karras is given permission by the bishop, who, at the request of the university's president, also hires Merrin to help, since he has prior experience with exorcisms.
Working together, Karras and Merrin attempt to exorcise Pazuzu from Regan, but the demon taunts them, especially Karras for his weak faith and guilt over his mother's death. Karras is dismissed after a break, as Merrin knows he is not mentally fit for a second attempt. Despite this, Karras returns to the room where Regan is now free from her binds and Merrin lies dead.
In a fit of rage he assaults Regan and orders the demon to take him instead. Pazuzu obeys and Karras throws himself from the window. He then dies of his injuries, but not before receiving last rites from his friend Father Dyer (William O'Malley).
Days later the McNeils leave for Los Angeles. They meet Dyer and say goodbye. Regan remembers nothing, but embraces him after noticing his white collar. After missing the duo, Kinderman decides to befriend Dyer by inviting him to see a movie with him. As Dyer already saw the movie, Kinderman takes him to lunch, and tries to investigate into the death of Karras.