In a small town in the Deep South, the friendship between Charles Eliot "Bubba" Ritter, a large but gentle mentally challenged man, and young Marylee Williams angers some of the townspeople, especially brooding, mean-spirited postal worker Otis Hazelrigg. When Marylee is mauled by a vicious dog, Hazelrigg, promptly assuming that Bubba is responsible, forms a lynch mob with three friends: gas station attendant Skeeter Norris and farmer-cousins Philby and Harliss Hocker. Bubba's mother disguises him as a scarecrow and posts him in a nearby field, but the lynch party's bloodhounds sniff Bubba out and the helpless Bubba is gunned down by all four vigilantes. When they learn afterwards that Marylee is in fact alive thanks to Bubba rescuing her, Hazelrigg places a pitchfork in Bubba's lifeless hands to make it appear as if he were attacking them. When brought to trial, the vigilantes are subsequently released because of lack of evidence against them (and blatant perjury by Hazelrigg).
Marylee recovers from the attack, sneaks out of her room at night and goes over to the Ritter house looking for Bubba. Mrs. Ritter, unable to bring herself to tell Marylee the truth, instead tells her that Bubba has gone away. Marylee runs out of the house to look for Bubba. Mrs. Ritter goes after her and finds her sitting under the stake where Bubba had been killed, singing a favorite song of hers and Bubba's. Marylee calmly tells Mrs. Ritter that Bubba is not gone, only "playing the hiding game."
Some time later, Harliss finds a scarecrow in his field like the one Bubba was disguised as, with no indication as to who put it there. Hazelrigg suspects Sam Willock, the district attorney, of putting it there to rattle them and tells the others to keep calm and do nothing. That evening, Harliss returns home to find the scarecrow gone. Hearing noise in his barn, he investigates. While he is checking the loft, suspecting that Sam is hiding in the barn, the wood chipper below starts up again of its own accord; startled, he loses his balance, falls out of the loft into the machine and is killed.
Learning of Harliss' death, Hazelrigg, Philby and Skeeter suspect that it wasn't an accident, and that night find that the wood chipper had not run out of gasoline after Harliss had been killed but had been switched off. The next day, Hazelrigg obliquely accuses Mrs. Ritter of having engineered this supposed "accident" and implies that, with Harliss dead, Bubba has been suitably avenged, "a life for a life." She denies involvement, but says that other agencies will avenge her son, also implying that Hazelrigg is a pedophile because of his intense interest in Marylee. The scarecrow soon reappears, this time in Philby's field.
At the local church's Halloween party that night while playing hide-and-seek with the other children, Marylee is confronted by Hazelrigg, who tries to get her to tell him that Mrs. Ritter is behind the recent events. Instead, she tells him that she knows what he and his friends did to Bubba and runs from him. Hazelrigg chases after her, but is stopped by a security guard. Philby tells Hazelrigg about the scarecrow's appearance, but when Hazelrigg and the others go to Philby's field, the scarecrow has disappeared. Later that same night, Hazelrigg breaks into Mrs. Ritter's house to make her stop her supposed plot, but frightens her so badly by his violent appearance that she suffers a fatal heart attack. To cover his tracks, Hazelrigg starts a gas leak, resulting in an explosion that destroys the house. While everyone else believes the explosion was an accident, the district attorney is suspicious.
The next night, Philby is disturbed by a commotion in his hog pen; while checking it out, mysterious occurrences make him panic and try to flee in his car, which refuses to start. He is pursued across his property and hides in a grain silo, shutting the door behind him. A conveyor belt feeding into the silo is switched on, and Philby, unable to open the now-locked door of the silo, is buried under the resulting avalanche of grain and suffocates.
The next day, when Hazelrigg tells him of Philby's death, Skeeter is ready to turn himself in, but Hazelrigg is now convinced that Bubba is still alive and responsible for the recent occurrences. That night, he and Skeeter dig up Bubba's grave, supposedly to prove Hazelrigg's claim that the coffin is empty; Skeeter opens the coffin to reveal that the corpse is in fact still there and in panic tries to flee. Hazelrigg chases after Skeeter and stops him; they return to the grave to refill it, but while Skeeter is down in the grave closing the coffin lid, Hazelrigg smashes in Skeeter's skull with a shovel and fills in the grave with Skeeter in it.
Driving home in an intoxicated state, Hazelrigg sees Marylee alone in the middle of the road. Pursuing her, he crashes his van and chases her on foot into a pumpkin patch. Catching up with her, he accuses her of masterminding the murders. A plowing machine nearby starts up of its own accord, and Hazelrigg flees as the machine pursues him. Running blindly through the field, now thinking Sam is in the machine, the terrified Hazelrigg runs headlong into the scarecrow, which is now holding the pitchfork that had been planted on Bubba's corpse, and impales himself on the tines. Mortally wounded, Hazelrigg, realizing the scarecrow was, in fact, behind the strange occurrences and murders, collapses and dies. Marylee, hiding in the pumpkin patch, hears footsteps approaching; she looks up to see the scarecrow looking down at her and smiles. It bends down, presenting her with a flower, and she says "Thank you, Bubba.", revealing Bubba's spirit returned from death and possessed the scarecrow to enact revenge on his killers. Marylee then makes plans for the next day to teach Bubba a new game.
The vigilantes who executed Bubba Ritter are killed one by one by supernatural means, with the scarecrow serving as a harbinger of their doom.
The film’s ending brings poetic justice as the scarecrow, linked to Bubba's memory, enacts retribution on those responsible for his death. The conclusion underscores the consequences of mob justice and prejudice, using supernatural horror to amplify the moral reckoning faced by the perpetrators.
