For generations, a secret war has raged between vampires and Lycans, an ancient species of werewolf. After years of fighting between the two enemy races, the vampires have seemingly gained the upper hand following the death of the Lycan leader Lucian (Michael Sheen) at the hands of a vampire named Kraven, who subsequently became the second-in-command to the vampires' triumvirate of leading elders. After the death of Lucian, the Lycan hordes scattered without a leader. It has been 600 years since that night. Since then, the Lycans have evolved and now can change into werewolves at will, without the need of a full moon night.

Selene (Kate Beckinsale), a member of an elite group of vampire assassins known as "Death Dealers", longs for revenge against the Lycans, who murdered her parents when she was a child. Her orders are to hunt down the Lycans and to kill them. Lycans have developed ultraviolet ammunition to kill the vampires. Vampires use silver rounds to stop the Lycans from shape-shifting into were-wolves.

During a clash with the Lycans, Selene discovers that they're looking for a seemingly ordinary medical student named Michael Corvin (Scott Speedman). In the clash a vampire named Rigel (Sandor Bolla) is killed, while Nathaniel (Hank Amos) was lost in the railway tunnels. Selene returns to the coven to ask for help. Kraven refuses to support Selene as he says that the Awakening (the 3 elders take turns being awake while the other 2 sleep, so that one else leads the coven at any time) is near and the coven is already in a state of uncertainty. Erika (Sophia Myles) is a vampire courtesan who desires Kraven's favor. Kahn (Robbie Gee) is the vampire scientist who says that it is unlikely that a Lycan den of that size exist as they have been hunted down to the brink of extinction.

Eventually Kraven sends his own henchman Soren (Scott McElroy) to search the tunnels for Lycans. Vampire elder Amelia is due to arrive in 2 days' time to awaken Marcus (one of the sleeping elders) and this will represent a shift in power from Kraven to Marcus.

Selene cannot still understand why the Lycans would track a mere human. She finds Michael's photo via CCTV footage and is able to track him down to his home address. Selene rescues Michael (when he was attacked by Lycans, led by Lucian, after returning from medical college). Selene and Michael find themselves pursued by a group of Lycans led by Lucian. Lucian (who is alive after all) was earlier shown to be searching for all humans with the surname Corvin and was testing their blood with his scientist Singe.

They escape, but Michael is bitten by Lucian who takes a blood sample of Michael. Singe tests the sample that Lucian brought back, and it is a positive match to what they are looking for. Selene is injured in the attack from Lucian and Michael saves her life when she crashes the car into the water at the docks. Selene takes Michael back to her Coven, where Kraven is angry with Selene for disobeying his orders. Kahn has developed silver nitrate bullets that the Lycans cannot eject from their body, like they do with the silver bullets.

Erika finds Michael but she sees that he has been bitten by a Lycan (and hence will turn into a Lycan himself) and gets hostile. This prompts Michael to escape, but he pursued by Lycans anywhere he goes.

Since Kraven (Shane Brolly) was the only witness to Lucian's supposed death, Selene comes to suspect that he lied about killing him and may be working with the Lycans. Kraven is shown to meet Lucian, confirming that Kraven was working in cahoots with Lucian and had lied about his death.

Now hesitant to trust Kraven, Selene returns to her coven's mansion and prematurely awakens a hibernating elder vampire named Viktor (Bill Nighy) (the second most powerful of the vampire elders), who is waiting for his turn to resume his place as the coven's leader. Selene had used her blood to awaken Viktor and with her blood, she transferred all her memories to Viktor as well. Angry at being awakened early, Viktor refuses to believe Selene's warnings about Kraven's treachery, and reminds her that his fellow elder Marcus was supposed to be awakened before him.

Michael arrives at the gates of the coven, being hunted by Lycans. Kraven would not allow him in, so Selene leaves with Michael. Selene tells Michael about the war between Lycans and Vampires and says that Michael been bitten by a Lycan. She says she only wants to know why the Lycans want him so badly.

While Selene awaits Kraven's judgment for defying him, she takes Michael to a safe house and binds, fearing that the Lycans' bite will transform him into a werewolf when the full moon rises. As the two of them bond, she gradually tells him more about her past, revealing that Viktor adopted her and turned her into a vampire after her parents' death.

Selene returns to the coven, and the Lycans (along with Singe) were waiting just outside to attack. Selene meets Viktor who says that chain of awakening has never been broken in 14 centuries. The Awakening is performed by an elder, as otherwise the thoughts have no time-line to it, and appear and jumbled images, as in the case of Selene. Viktor says that Selene has no proof that Lucian still lives. Viktor says that Council of elders will decide Selene's fate and puts Kraven back in command. Erika overhears that Kraven intends to make Selene his future queen, instead of her.

The vampire elder Amelia (Zita Gorog), the ruler of the coven, is ambushed and killed by Lycans while traveling to the coven's mansion to awaken Marcus. The Lycans attack the Vampire safe house after a call from Kraven. Selene goes to her safe-house to save Michael. Selene manages to capture and abduct the Lycan scientist Singe (Erwin Leder), while the Lycans manage to abduct and capture Michael.

While held captive in the Lycans' lair, Michael soon learns that Lucian was once in love with Viktor's daughter Sonja (Jazmin Dammak), and that Viktor murdered her after he discovered their forbidden love affair. Lucian was forced to see Sonja die and this is what started the war. Lucian claims that Lycans were once slaves of vampires, and the war began when they rose up against them and fought for their freedom.

While being interrogated by Viktor back at the vampires' mansion, a captive Singe reveals that Selene was telling the truth about Kraven's betrayal, and he reveals why the Lycans want Michael: vampires and Lycans actually have a common ancestor, and Michael is a direct descendant of that ancestor. Alexander Cornivus was a Hungarian warlord in the 5th Century and his village was ravaged by a plague. Alexander survived as his body was able to shape the disease to its benefit and become the first true immortal. He had 3 kids, one bitten by a bat, one by a wolf and the 3rd remained a human (who carried the original strain of the virus through his descendants all the way to Michael Corvin).

As an heir to the legendary "Corvinus" bloodline, he carries a unique genetic strain that could allow him to become a vampire-werewolf hybrid. Singe also confirms that Lucian is alive, and Kraven lied. Singe says that Lucian has Amelia's blood to create the hybrid, who would be stronger than both. Viktor kills Singe in the sleeping chambers.

In the ensuing showdown between the vampires and the Lycans, Selene breaks into the Lycans' lair to rescue Michael, while Kraven and Lucian turn on each other. Kraven shoots Lucian with the silver nitrate bullet, seemingly killing him. Lucian survives and sees that Selene is in love with Michael. Kraven finds Michael and Selene and shoots Michael. Kraven tells Selene that Viktor was the one who really murdered her human parents (as Viktor lost control of his own senses (which was against the rules) and wanted human blood). Lucian stops Kraven from killing Selene and urges Selene to bite Michael. Michael allows Selene to bite him - believing that her bite will make him an immortal vampire-werewolf hybrid, and that would be the only way to survive.

Kraven kills Lucian, but Viktor arrives forcing Kraven to flee. When Viktor arrives at the Lycans' lair in the aftermath of the battle, he admits to murdering Selene's parents and killing his daughter, but staunchly defends his actions; he insists that he killed Sonja for the good of his people and claims that he made Selene immortal out of love for her.

Viktor tries to kill Michael, but Selene turns against him and kills him with the aid of Michael, who becomes a hybrid. Now enemies of both the vampires and the Lycans, Selene and Michael flee the Lycans' lair together. Back at the vampires' mansion, Marcus, now the sole surviving vampire elder, awakens after Singe's blood seeps into his sarcophagus.