The story begins with two teenage girls discussing the events of the previous weekend, during which one of them, Katie Embry (Amber Tamblyn), went to a cabin in the mountains to spend time with some friends.
While talking, the subject of a supposedly cursed videotape is brought up. The other girl, Rebecca 'Becca' Kotler (Rachael Bella), states that anyone who watches this video receives a phone call, in which a voice says, "you will die in seven days."
Then, exactly seven days (to the minute) after viewing the tape, the viewer dies. Katie reveals in horror that she had watched that video at the cabin last weekend with three friends, exactly seven days earlier.
After a series of unexplainable occurrences, involving a television in the house turning itself on and eerie sounds, Katie is mysteriously killed while Becca has the misfortune of watching, causing her to be institutionalized in a mental hospital.
The film then introduces Katie's aunt, Rachel (played by Naomi Watts), a journalist living in Seattle. Her son, Aidan, was not only Katie's cousin but also a good friend, and seems to be sensitive to psychic occurrences.
Aidan's teacher brings to Rachel's attention that he had been drawing pictures of his cousin dead in the ground for days before Katie actually died. At Katie's funeral, Rachel's sister asks her to investigate her daughter's death, and, as she begins, she learns of the videotape.
Her investigation leads her to the same cabin in the mountains where Katie and her friends had watched the tape. There, she finds the tape and eventually watches it. After that the phone rings and a girl says - seven days.
The next day she calls Noah, Aiden's father, to see the video. He asks her to make a copy for further investigation. Unfortunately, Aidan watches the tape a couple days later.
After viewing the tape, strange things begin to happen to Rachel, and presumably anyone else who had viewed the cursed images.
She experiences terrible nightmares, nose bleeds, and curious surreal situations (such as when she pauses a section of the cursed tape in which a fly is running across the screen, she finds she is able to pluck it from the monitor).
Rachel's investigation turns to the tape itself, which contains a seemingly random series of disturbing, grainy, black and white images. Investigating those images leads Rachel to Anna Morgan (the woman seen in the tape) who lived on Moesko Island with her husband and daughter, and raised horses.
Rachel discovers that a mysterious tragedy befell the Morgan ranch, in which all the horses seemed to go mad, killing themselves attempting to flee the ranch.
For reasons that were never completely explained, this presumably caused Anna Morgan to become severely depressed, and shortly after taking residence at a mental institution, to commit suicide.
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