After being sucked into a swirling time vortex at the end of Evil Dead II, supermarket clerk Ash Williams crashes down in 1300 AD England with his 1973 Oldsmobile, a chainsaw, and his shotgun. He is quickly chained up by Lord Arthur's men, who mistake him for an enemy soldier allied with Duke Henry the Red. Arthur marches the captives back to his fortress and casts Ash into a deadly stone pit containing vicious Deadites.

With help from Arthur's court Wiseman, who throws down Ash's chainsaw, Ash slaughters the monsters in the pit, climbs out, and asserts authority by blasting Arthur’s sword apart with his shotgun. He earns the awe of the locals, captures the heart of a maiden named Sheila, and agrees to retrieve the Necronomicon Ex-Mortis so the Wiseman can use it to send him home.

Ash rides out into the haunted woods to locate the cemetery. Along the way, an unseen force chases him into a windmill, where he breaks a mirror; multiple miniature versions of Ash crawl out of the glass shards to torment him. He swallows one little clone in frustration, causing a full-sized clone, Evil Ash, to tear its way out of his body. Ash shoots Evil Ash, dismembers him, and buries him before heading to the graveyard.

At the altar, Ash finds three identical Books of the Dead. After testing them through painful trials, he finds the correct book. He tries to speak the sacred phrase required to take it safely: "Klaatu barada nikto". Unable to remember the final syllable, he fakes it by coughing out "necktie". This mistake breaks the seal, awakening the Deadite army.

Evil Ash rises from his shallow grave as a rotting skeletal commander, abducts Sheila, and marches his legion toward the castle. Ash uses his modern mechanical know-how to rally Duke Henry and Lord Arthur to unite. He converts his Oldsmobile into a steam-driven death machine and manufactures gunpowder. In the final siege, the living defend the walls, Ash defeats Evil Ash in hand-to-hand combat, rescues a freed Sheila, and shatters the army with the Deathcoaster car.

In the theatrical ending, the Wiseman brews Ash a sleeping potion, instructing him to drink exactly six drops so he will sleep through centuries and wake up in the 20th century. Back in modern times, Ash returns to his day job at the S-Mart housewares department. While telling an exaggerated tale of his medieval exploits to a coworker, an unkilled Deadite witch attacks the store. Ash grabs a display Winchester rifle, spins around, blows the monster away, sweeps a coworker into his arms, and utters the famous line: "Hail to the king, baby."

An alternate, darker director's cut ending exists where Ash makes another simple counting error, swallows too many drops of the potion, and wakes up in the middle of a post-apocalyptic, burned-out modern world.