Rome, Italy, June 6, 1966, 6:00 am. Robert Thorn (Gregory Peck) is an American diplomat who hurries to a local hospital where his pregnant wife Katherine (Lee Remick) is going into labor. When he gets to the hospital, he is informed that his child was a stillbirth. Katherine wanted a baby so much for such a long time. A priest named Father Spiletto (Martin Benson) then offers him the choice to adopt a child, but Katherine wanted her own.
Spilleto has a baby boy shown to Robert, just born at the same time. The baby even has the same likeness as their stillborn and his wife would never need to know. It would be a blessing to Katherine and to the child. The mother died giving birth and the child has no relatives. Thorn is reluctant to do so but knowing his wife will be devastated by the news of the death of her real child, he agrees to the adoption. Soon after, Robert presents the child to Katherine.
A few years later, Robert arrives at their home where Katherine is dressing their toddler, Damien (Harvey Stephens). Robert makes a big announcement that they are moving to London because he has been appointed Ambassador to the Court of St. James, Great Britain. Katherine is thrilled over the news.
London: Katherine has already picked an elegant home, though Robert thinks it's a bit much. Katherine counters that nothing's too much for the wife of the future president of the United States. He scoffs at the notion. Entering the Day Room, Robert looks out the window and sees Damien playing with the nanny, Holly (Holly Palance), on the balcony. They soon settle in and appear as a happy family, enjoying life in London. Some time later, Robert is to fly to the States to meet with the president, but Katherine and Damien will remain in London.
We cut to the celebration of Damien's fifth birthday, a large outdoor party is held filled with a swarm of kids, dignitaries, and professional photographers shooting the event. Katherine feels a bit disturbed about Holly's possessive nature with Damien, who constantly has him in her arms. Katherine steps in to take him, Holly hesitantly gives him up. A moment later, Holly walks away and sees a large Rottweiler dog watching from a short distance. She locks eyes with the dog, and the escalating music suggests an intensity between the two.
Moments later, the party continues with the kids enjoying various amusement rides when we hear Holly calling to Damien from a distance. Everyone turns to see Holly with a noose around her neck and standing on the third floor ledge of the Thorn home. Holly proclaims her love for Damien and jumps. Her swinging body crashes into the window as the rope snaps her neck. Shocked, Katherine averts Damien's eye from the horrific scene.
After a wave of screams, the crowd silently stares at the dead Nanny. Previously bored by the event, photographer Keith Jennings (David Warner) revs up his camera, shooting photos of the dead Nanny and the Thorns.
Robert rushes to Katherine and Damien, and holds them tightly. Damien seems unphased by the tragedy and only stares at the Rottweiler dog. He waves at the dog, it then runs off. Soon after, Robert arrives at the Ambassador building and is hounded by journalists regarding the apparent suicide of Holly and questions whether she was on drugs.
Robert bumps into Jennings, causing him to drop his camera. He offers to pay for the damage, but Jennings declines and suggests Robert now owes him.
Moments later, a priest, Father Brennan (Patrick Troughton) arrives at Robert's office requesting a moment of his time. Brennan is very solemn, gets right to the point, and states there isn't much time. He begs Thorn to accept Christ, because only then can he fight the son of the devil. Brennan claims to have been present during Damien's birth in Rome five years ago.
He witnessed the birth and saw "it's" mother. Robert suspects Brennan knows something about the hush-hush adoption and is there to blackmail him. Brennan knows that Katherine is not Damien's true mother. Just as Brennan states, his mother was a Jack--, security bursts in and interrupts him. The priest is escorted out by security and Jennings takes note of the visitor, snapping his picture (apparently more than once off screen).
While developing the pictures of the day, Jennings notices the priest has a dark object like a javelin over his head in the pictures he appears in, but the anomaly doesn't appear anywhere else on the photos.
A few days later, a new nanny (formerly called governess), named Mrs. Baylock (Billie Whitelaw) is sent to replace Holly but it is clear that she is not as she seems. After making a sales pitch about her dedication, she requests to see Damien alone. Katherine is uneasy with that, but Robert thinks it will be fine and to give it a try.
After she leaves the room, Robert and Katherine remark they like her, but soon become confused when they realize neither of them found her. Just as Mrs. Baylock is about to approach Damien's room, Robert and Katherine stop her to question her how she got there. Baylock claims the agency read about the first nanny and sent her as replacement. Katherine points out that whe will call the agency to confirm that and Baylock offers her references.
She then enters Damien's room. Lying on the floor next to a fireplace, Damien looks up at her. Baylock tells him to have no fear and she is there to protect him. Damien remains silent, but smiles at her. Mrs. Baylock immediately challenges Katherine's authority when she is instructed to dress and ready Damien to attend a church wedding with them, but she does as she is told.
The Thorns travel to the church and Damien becomes more fearful as their car approaches the church. Katherine notices he is trembling and when they pull up to the church entrance, Damien sees a statue of Christ. Damien flies into a rage, striking his mother and yanking her air. Roberts orders the chauffer to drive on and the car pulls away hurridly
That evening, Katherine is treating her bruises on her face. The Thorns discuss Damien's reaction and whether he should be examined by a doctor. Robert finds it a little strange that Damien has never been sick a day in his life, no measles, no mumps, no chicken pox, not even a cough or a cold. Katherine dismisses it as a perfectly healthy boy, he just had a bad moment, or a fright. Katherine retires to bed while Robert goes to check on Damien.