The story begins by reprising the conclusion of Part 2, with camp counselor training assistant Ginny (Amy Steel) running through the woods to Jason Voorhees' (Steve Daskawitz) run-down, backwoods shack, where she sees Mrs. Voorhees' (Betsy Palmer) severed and mummified head on a makeshift altar.
She is pursued by the grotesquely-deformed stalker-killer Jason wearing a pillow-case (with one eye-hole) on his head, and fools him for a few moments by impersonating Mrs. Voorhees. After she delivers a decisive and deep blow to Jason's shoulder with a machete, he collapses to the floor and she and boyfriend Paul (John Furey), believing him to be dead, flee together back to her cabin.
Part 3 continues the story with Jason (Richard Brooker), who has seemingly survived his attack from Paul and Ginny, and migrates to a store. Curlers-wearing wife Edna (Cheri Maugans) harshly complains to her pudgy husband Harold (Steve Susskind) for clumsily knocking down her single clothes-line pole support, and dirtying up some of the freshly-hung laundry. Harold owns the country market near Crystal Lake, a roadside Mom-and-Pop type store next to their living quarters.
As Edna sits knitting, a TV newscaster reports on a grisly mass murder scene in the quiet community of Crystal Lake - the discovery of eight corpses. Ginny Field was the lone survivor and was taken to a local hospital. The reporter continues with unconfirmed reports of cannibalism and sexual mutilation, and states that the killer remains at large. Upset by the news, Edna continues griping about her inconsiderate and lazy husband as she goes out to the clothesline to gather dry laundry, while Jason watches her, who has now changed his clothes.
The henpecked husband is further criticized by Edna for sneaking food. Inside his wooden shed, Harold finds a dead rabbit in his rabbit hutch, and a large timber rattlesnake lunges directly at him from inside the enclosure. He races back inside to his living quarters and retreats to the bathroom.
Harold suspects a noise behind a dusty curtain, but finds nothing. As he searches around and opens another door, a meat cleaver strikes him, embedding deeply into his chest. When Edna hears something, she goes to look for Harold and is spooked by a white rat. From behind, a hand grabs her mouth, and her own knitting needle is pierced into the back of her head, causing her to gag and slowly fall dead.
At the same time, 18-year-old Chris Higgins (Dana Kimmell), who was attacked by a disfigured stranger in the woods near Crystal Lake two years earlier, returns to the property with her friends; Debbie (Tracie Savage), her boyfriend Andy (Jeffrey Rogers), dim-witted prankster Shelly (Larry Zimmer), Vera (Catherine Parks), and stoners Chuck (David Katims) and Chilli (Rachel Howard). On the way there, they rubber-neck at the rural store and see the body bags of the two Crystal Lake storeowners being loaded into an ambulance at the crime scene.
On a dirt road, they screech to an abrupt halt before the outstretched figure of a man dangerously lying across the road. He is identified as elderly Abel (David Wiley), a crazy, inebriated derelict and religious fanatic, who shows them a slimy, detached eyeball that he had found. He interprets the detached body part as a warning for them to turn back. The group cringes in disgust, return to their van, and drive off.
The gang meets Chris' boyfriend Rick (Paul Kratka) at their destination, Higgins Haven.
Chris intends to face her fears, however, none of her friends know that an unmasked and reclusive Jason has taken refuge in the barn to recover from his wounds.
Meanwhile, Shelly and Vera go shopping at a local supermarket to get food and supplies when they get into trouble with a biker gang trio, called the Black Widows, led by a brutal woman named Fox (Gloria Charles).
When Shelly accidently knocks over their motorcycles outside the store, Fox and her two minions Ali (Nick Savage) and Loco (Kevin O'Brien) follow Shelly and Vera back to Higgin's Haven for revenge. However, they are dealt with by Jason before they can do any real damage except for taking the gas out of the gang's van.
While looking around the barn in fascination, Fox is murdered with a pitchfork to her neck. Loco looks for her and gets impaled with a pitchfork. Ali is next when he enters the barn and Loco's body falls on him from the hay loft above. He attacks the unseen Jason, but gets bludgeoned with a 10" pipe wrench.
At nightfall, Jason continues lurking around the barn while spying on the kids who settle down for the evening, entertaining themselves. Chris and Rick, who had taken a drive to a clearing aways from the cabin for a heart to heart talk, are forced to walk back due to the Volkswagon's battery going dead.
When Chuck goes to an outhouse to take a dump and smoke more pot, someone walks past and rattles the walls of the outhouse before retreating. From a distance he sees Jason entering the barn, thinking it's Shelly. He turns and is startled when Chilli pops in his face.
A hesitant Chuck follows Chilli into the barn, she wants to get him back for his pranks. Finding no one, Chuck convinces Chilli to leave while Jason watches them walk away.
Later, Shelly, wearing a wet-suit, a Red Wings hockey mask, and holding a spear gun, plans another scare prank against Vera, who is sitting on a dock beside Higgins Lake. After startling her, Vera reprimands him for his immature pranks. Shelly walks off to the front porch, feeling sorry for himself. He hears a noise and makes his way into the barn.
Meanwhile, Vera is still on the dock looking at Shelly's wallet. She accidentally drops it into the lake and wades out in the shallow water to retrieve it. Jason appears and he's now wearing Shelly's hockey mask and carrying the spear gun. Vera thinking it is still Shelly, retrieves the wallet, and whens she gets a closer look at him, she questions if that is really Shelly.
At first she's angry that he's pointing the spear gun at her, thinking it's another one of Shelly's pranks. However, Jason shoots Vera right in her left eye, killing her as her body falls in the water. Jason drops the spear gun and walks off, staring at the cabin.
We cut to Debbie and Andy finishing up a love session in the hammock. Debbie goes to the bathroom for a shower. Jason sneaks into the house carrying a machete, where he continues onward with his killing spree. Debbie hears the bathroom door open and is startled by Andy, who is walking on his hands.
He offers to go get beer, continuing his upside-down walk on his hands. Andy stops and right before him looking down at him is Jason. The masked killer swings the machete, hacking into Andy's upside-down body. From the shower, Debbie calls out to him, but Andy doesn't answer. Debbie finishes up her shower and continues her futile calls to Andy.