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In the late 2020s the world is in turmoil, with the United States fractured as a result of prolonged civil war and a pandemic of the "St. Mary's Virus" ravaging Europe. The United Kingdom is ruled as a fascist police state by the Norsefire Party. Political opponents, immigrants, Muslims, homosexuals and other "undesirables" are imprisoned in concentration camps. On November 4, a Guy Fawkes-masked vigilante identifying himself as "V" (Hugo Weaving) rescues Evey Hammond (Natalie Portman), an employee of the state-run British Television Network (BTN), from members of the "Fingermen" secret police while she is out past curfew. From a rooftop, they watch his demolition of the Old Bailey criminal court building, accompanied by fireworks and the 1812 Overture. Inspector Finch (Stephen Rea), Scotland Yard's Chief of Police, is tasked with investigating V's activities while BTN declares the incident an "emergency demolition". V interrupts the broadcast to claim responsibility and encourage the people of Britain to rise up against their government and meet him on November 5 (Guy Fawkes Night), outside the Houses of Parliament. During the broadcast, the police attempt to capture V. Evey helps him escape but is knocked unconscious.
V takes Evey to his home, where she is told she must remain for one year. V then kills Lewis Prothero (Roger Allam), Norsefire's chief propagandist, and Anthony Lilliman (John Standing), the Bishop of London who is also a pedophile. Evey offers to help, and uses the opportunity to escape to the home of her boss, comedian and talk show host Gordon Deitrich (Stephen Fry). In return for Evey trusting him with her safety, Gordon reveals prohibited materials including subversive paintings, an antique Quran, and homoerotic photographs. After Gordon performs a satire of the government on his show, his home is raided and Evey is captured. She is imprisoned and tortured for information about V, with her only solace being a note written by actress Valerie Page (Natasha Wightman), a former prisoner.
Evey is told she will be executed unless she reveals V's location. When she says she would rather die, she is released and finds herself in V's home. It turns out that V was the one who had "captured" her at Gordon's home, and staged her imprisonment and torture to free her from her fears. The note was real, passed from Valerie to V when he was imprisoned. He also informs her that Deitrich had been executed when the Quran was found in his home. While Evey initially hates V for what he did to her, she realises she has become a stronger person. She leaves him, promising to return before November 5.
Finch learns V is the result of human experimentation and is murdering the people who detained him. Finch searches for the true identity of V, tracing him to a bioweapons program at a detention centre for "social deviants" and political dissidents in Larkhill concentration camp. Finch meets William Rookwood, who tells him that the program, directed by then-Undersecretary Adam Sutler (John Hurt), resulted in the creation of the "St. Mary's Virus" and its release in a false flag terrorist attack. The deaths of over 100,000 people and the resulting fear enabled the Norsefire Party to win the next election and turn the country into a totalitarian state under Sutler's rule as High Chancellor. Finch later discovers the man he met was V in disguise, and Finch initially disbelieves his story.
As November 5 nears, V distributes thousands of Guy Fawkes masks and the population questions Party rule. On the eve of November 5, Evey visits V, who shows her an explosive-laden train in the abandoned London Underground, set to destroy Parliament. He leaves it to Evey to decide whether to use it. V meets Party Leader Creedy (Tim Pigott-Smith), with whom he made a deal to surrender in exchange for Sutler's execution. After Creedy executes Sutler, V reneges on his deal and kills Creedy and his men. Mortally wounded, he returns to Evey and tells her he loves her before dying.
As Evey places V's body aboard the train she is found by Finch. Disillusioned by the Party's regime, Finch allows Evey to send the train. Thousands of unarmed Londoners wearing Guy Fawkes masks march towards Parliament. As Creedy and Sutler are both dead, the military receives no orders, and allows the crowd to pass. Parliament is destroyed as Finch asks Evey for V's identity, to which she replies, "He was all of us."