In 1956 Tarascon, France, Father Noiret and his altar boy Jacques witness disturbing paranormal phenomena inside their church. An unseen entity lifts the priest into the air, douses him in holy water turned flammable, and incinerates him alive. The Vatican notices a geographic pattern of violent, unexplained clerical deaths moving steadily from Romania through Europe toward France. They summon Sister Irene, who is living anonymously in an Italian convent, ordering her to investigate what appears to be the return of Valak.

Irene reluctantly accepts the assignment, accompanied by Sister Debra, a rebellious young American novitiate who struggles with her faith. Guided by visions, Irene traces the murders to a Catholic boarding school in Aix-en-Provence, France, which previously served as a monastery. Working there as a groundskeeper is Maurice (Frenchie), who has formed a warm bond with teacher Kate and her bullied young daughter Sophie. However, Maurice experiences recurring blackouts and erratic shifts in behavior, completely unaware that Valak has been using him as a parasitic vessel ever since their escape from Romania.

At the school, students begin seeing horrific apparitions, and the strict headmistress Madame Laurent is violently killed by a manifestation of the demon. Investigating ancient Church archives, Irene and Debra learn that Valak is seeking the eyes of Saint Lucy, an ancient Christian martyr. St. Lucy's eyes were secretly buried beneath the former monastery, and obtaining them grants a demon immense supernatural invulnerability.

Irene and Debra arrive at the boarding school just as Maurice fully succumbs to the demonic possession. While Sophie and her mother flee through collapsing corridors, Irene and Debra race to the sealed wine cellar to locate the hidden relic before Valak claims it. Maurice attacks Irene with superhuman strength, nearly choking her to death before Debra manages to distract him.

Irene excavates the ornate reliquary containing the sacred eyes, but Valak tears free of Maurice and seizes the relic, lifting Irene into the air and attempting to immolate her. Drawing upon her spiritual heritage as a descendant of Saint Lucy, Irene's faith shields her from the flames. Irene and Debra focus their prayers, consecrating the leaking vats of wine flooding the cellar into the Blood of Christ. The holy wine washes over Valak, burning away the demon and casting it out once again, leaving Maurice unconscious but alive.

With Valak banished and the holy eyes safeguarded, Maurice recovers from his trance and reunites with Kate and Sophie. Irene shares an emotional farewell with Maurice, but lingering dread hangs in the air, knowing the demonic taint has already touched his soul.

In a mid-credits scene, the timeline jumps to the 1970s Warren household. Ed and Lorraine Warren receive an urgent telephone call from Father Gordon, teasing the upcoming historical exorcism of Maurice Theriault that will ultimately spark Lorraine's Amityville nightmare seen in The Conjuring 2.