Telly Paretta (Julianne Moore) believes that her son, Sam (Christopher Kovaleski), died fourteen months ago in a plane crash, but her husband Jim (Anthony Edwards) tells her that she's delusional and that they have never had a son and even her best friend Eliot (Jessica Hecht) doesn't appear to believe in Sam's existence despite her closeness to him. Dr. Munce (Gary Sinise) tells her that Sam was merely a figment of her imagination and is just imagining a life that might have been. He recommends that she be sent to a hospital, but she runs away and meets with a man named Ash (Dominic West) who she thinks is the father of a girl (Kathryn Faughnan) who was friends with her son and died in the same crash. At first he dismisses her, claiming he never had a daughter, and calls the police. After she is taken into custody, however, he remembers his daughter and rescues Telly. Together they escape and go into hiding, pursued by National Security agents. Telly and Ash capture an agent (Lee Tergesen), whom they threaten. The agent reluctantly reveals that he and other agents are merely helping "them" and that they do so to protect humankind. The roof of the house blows off and the agent, along with the roof, is sucked into the sky — presumably taken by "them"- and Telly and Ash flee. Eventually, Telly visits Dr. Munce again and he reveals that the disappearances are the work of "them," and that the government monitors their trials, all too aware that they have no power to stop "them" from doing whatever they want. Doctor Munce takes Telly to an airport and the dilapidated hangar of Quest Airlines, where he introduces her to an agent of “them” (Linus Roache). He tells the agent that “It’s over,” and to stop the experiment because it will only cause more harm. The agent replies, saying “It’s not over,” and then tells Telly that she has been a part of an experiment to test whether the bonds between mother and child can be diminished. In her case, her memories could not be erased. Telly refuses to deny her son's existence. The agent mentions that if he fails to erase her memory then he will look like a failure. The agent then subdues her and finally succeeds in erasing her memories of her son. During further questioning, though, a question about the name of her son triggers Telly's memory of her pregnancy, and all of her memories of Sam return. This causes the agent to be "abducted" himself, supposedly for his failure to erase her memory. This ends the experiment. Telly finds herself living a normal life, although she remembers everything that has happened. She reunites with Sam at a park. Also at the park is Ash, watching over his daughter. Like Sam, he has no memory of what has happened. Telly reintroduces herself, and the two sit and watch the kids play in the playground.

When Bobby Saint and Mickey Duka meet with European arms dealer Otto Krieg at the Tampa, Florida seaport, the FBI intervenes and Saint is killed while Duka is jailed. "Krieg", supposedly killed in the shootout, is actually undercover FBI agent and former U.S. Army Delta Force operator Frank Castle. Shortly thereafter, he retires from the FBI and attends a family reunion at his father's oceanside home in Aguadilla Bay, Puerto Rico. Tampa crime boss Howard Saint is enraged by the death of his son, and with right-hand man Quentin Glass bribes the FBI for confidential information about "Krieg". Saint orders Castle murdered, and Saint's wife, Livia, demands Castle's entire family be killed as well to "settle the score". At the reunion, gunmen including Glass and John Saint, Bobby's identical twin, kill most of the extended family. Castle and his father kill several of the attackers before Castle's father is killed. Castle's wife and son try to escape in a Jeep, but Saint runs over them with a truck, killing them. Castle, shot in the chest and blown off a pier in an explosion set by Glass, survives and is nursed back to health by a local fisherman, Candelaria. Once recovered, Castle goes to Tampa and takes refuge in an old tenement where three young outcasts — Dave, Bumpo and Joan — live. Castle abducts Duka, who fearfully gives up information about the Saints — whom he, too, hates, and so willingly becomes Castle's mole. Castle starts exacting revenge on the police and FBI agents who have been bribed to close the investigation of his family's murder. In the process, he sabotages Saint's money-laundering business and severs Saint's partnership with Cuban mobsters the Toro Brothers, and starts tailing Livia and Glass, whom he learns is a closeted homosexual. Saint, realizing Castle is alive, sends two assassins to kill him. Castle kills the first, guitar player Harry Heck, by shooting a ballistic knife into Heck's throat. The second is "the Russian", a behemoth who beats Castle in a brutal fight but is defeated when Castle throws boiling oil in his face, blinding him long enough for Castle to throw him down a staircase, breaking his neck. Moments later, Saint's men arrive, led by Glass and John Saint. Dave, Joan and Bumpo hide Frank and refuse to tell Glass where he is, despite Glass sadistically pulling out Dave's multiple facial piercings with a pair of pliers. They leave a man behind to kill Castle upon his return, but Castle kills him once Glass and the others are gone. With assistance from Mickey, Castle manipulates Saint into believing Glass and Livia are having an affair. Saint, unaware Glass is gay, and believing Livia to be capable of cheating on him, kills them both personally, neither of them knowing why. Castle attacks Saint's headquarters, the downtown Tampa nightclub Saints and Sinners, killing many of Saint's henchmen. He kills John Saint by having the crime boss' son hold an eight-pound, trip-wire activated grenade until his arm wearies and the grenade explodes, killing him. Castle wounds Howard Saint with a pistol when Saint attempts to shoot him in the parking lot of the nightclub. Castle then ties Saint to a slow-moving car, but not before revealing that Glass and Livia were not having an affair. Several hidden bombs go off, and the destruction and wreckage culminate in the shape of the Punisher's iconic skull. Later that night, Castle returns to his apartment and prepares to commit suicide, but after a brief vision of his wife, decides to continue his vigilante mission against others who in his mind deserve punishment. Before departing on his next mission, he leaves most of Saint's money for Bumpo, Joan and Dave. On the Sunshine Skyway Bridge, he vows, "Those who do evil to others — the killers, the rapists, psychos, sadists — will come to know me well. Frank Castle is dead. Call me the Punisher."