Robert Eggers brings his singular mastery home to America in this pitch-black modern fairytale.

In the late 19th century, Ephraim Winslow is sent on a boat to serve a contract job as a wickie for four weeks on an isolated island off the coast of New England, under the supervision of an irritable elderly man named Thomas Wake. On the first day of the job, Winslow notices a hole in his cot. As he digs into it, he finds a small scrimshaw of a mermaid and stuffs it in his jacket. Winslow observes Wake going up to the lighthouse's lantern room at night and stripping naked. Winslow begins experiencing visions and dreams of tentacles in the lighthouse, tree stumps floating in the water, and distant images of a mermaid.

Over the course of his stay, Wake demands Winslow take the more taxing jobs—refueling the light, carrying heavy kerosene containers, and disposing of the two men's chamber pots. As the weeks progress, Winslow repeatedly encounters a one-eyed gull. Wake warns Winslow that it is bad luck to kill a gull, as he is superstitious that the animals are reincarnated sailors. The weeks continue, and Winslow masturbates to the figurine of the mermaid and continues to see Wake naked. One night at dinner, the two get to know each other and discuss Wake's previous second wickie, who Wake says died shortly after losing his sanity. Winslow reveals that he used to work in Canada as a timberman, but decided to change professions.

The day before Winslow is slated to leave, he notices the water pump is releasing bloody water and investigates. He checks the cistern to see a dying gull floating inside. The one-eyed seagull flies down and attacks Winslow, who grabs it and beats it to death against the cistern. That afternoon, the winds dramatically change direction. That night, a storm hits the island, and the two men get drunk. The next morning, the ferry does not arrive, and Winslow sees a body washed up on the shore. He approaches the naked body and realizes that it is a mermaid. He runs back into the cottage to find Wake stating that the rations were affected by the storm. Winslow believes that the ferry was due the night before, but Wake insists that weeks have in fact since passed. They dig up a crate said to contain extra rations, but it only contains more alcohol.

More nights progress, and the storm continues, and the two men grow closer while remaining adversarial. Winslow unsuccessfully tries to steal the key to the lantern room from a sleeping Wake. He has visions of a lobster trap containing the severed, half-blinded head of Wake's previous wickie. One night, Winslow tells Wake that his real name is Thomas Howard and that he assumed the identity of Ephraim Winslow, Howard's foreman who died in an accident Howard failed to stop. Wake accuses Howard of "spilling his beans," and Howard tries to leave. He attempts to escape on the dory, but Wake destroys it with an axe. Wake chases Howard into the cottage, but inside, Wake claims that it was Howard who attacked him. With no alcohol left, the two begin mixing spirits out of turpentine and honey, and the storm becomes so powerful that waves crash through the windows of the cottage.

The next morning, Howard finds Wake's log, recording his infractions and recommending severance without pay. Wake chides Howard for his work performance while Howard accuses Wake of mental abuse, then begs him to see the light that Wake has been keeping from him. Wake berates Howard, and Howard attacks him. While seeing visions of the mermaid, Wake as a sea monster, and the real Winslow, Howard beats Wake into submission. Howard leashes Wake with a rope and buries him alive in the ration pit. Wake briefly comes to and curses Howard to a "Promethean fate." Howard takes the keys and prepares to go up to the lantern room, but Wake appears and strikes him in the shoulder with the axe. Howard disarms Wake with a kettle pot and kills him with the same axe before ascending the lighthouse. He approaches the Fresnel lens, and it stops and opens up to him. Howard gazes into the mirrored interior in ecstasy and reaches his arm inside. He then lets out distorted screams as the light brightens, growing louder and brighter, before slipping, breaking his leg and falling down on the lighthouse steps. Howard is finally seen lying naked on the rocks, missing an eye as several gulls defecate on him and peck at his innards, eating him alive.