In 1964, an expecting Ed and Lorraine Warren investigate a haunting involving an antique mirror at a curio shop. Lorraine collapses upon seeing a vision of an entity and her unborn child, and goes into labor. Ed speeds Lorraine to the hospital, but the baby is stillborn. However, Lorraine's prayers revive the baby, whom she names Judy.
Twenty-two years later, the Smurl family moves to West Pittston, Pennsylvania. Jack and Janet Smurl share the home with Jack's parents, Mary and John, along with their four daughters: Dawn, Heather, and twins Carin and Shannon and their dog, Simon. For Heather's confirmation ceremony, John gifts her the antique mirror. During dinner, a kitchen ceiling light suddenly crashes down, narrowly missing Heather.
Due to Ed's worsening heart condition, the Warrens retire from their investigations but continue giving lectures, which are now sparsely attended. While at dinner, Judy, who has become increasingly sensitive to psychic visions, has an episode and begins to panic. Using a rhyme created while Judy was a little girl, Lorraine helps her calm down and reminds her to always shut herself off from the supernatural. Dawn and Heather attempt to dispose of the mirror, but the family continues to be terrorized by three entities: an elderly woman, a younger woman, and a man wielding an axe. Exhausted, the family shares their story with the press in the hope of finding help, which attracts the interest of Father Gordon.
Judy's boyfriend, Tony, proposes to Judy during Ed's birthday party, which she accepts. Unable to obtain the Warrens' help, Father Gordon goes to the Diocese of Scranton to seek help for the Smurls. The demon attacks Gordon at the diocese and induces him to commit suicide. At Father Gordon's funeral, Judy learns from a vision that he died while investigating the Smurls' haunting. She secretly leaves for Pennsylvania to investigate, and Lorraine has a vision that warns her about Judy.
Ed, Lorraine, and Tony are led to the Smurls, and Judy convinces her reluctant parents to help. Lorraine discovers that the three spirits are of a husband who had killed his wife and her mother, but they are being controlled by the demon. The demon tricks Judy into the attic, where she is attacked, causing her to fall down the stairs. Ed and Lorraine discover the mirror and realize it is the demon from their first investigation. Certain that the demon is hunting Judy, they decide to transport the mirror back to their home, where it can be contained. Judy suddenly falls ill as Ed, Jack and Tony attempt to remove the mirror from the house, but they fail.
The demon possesses Judy and causes Ed to have a cardiac episode while Lorraine is attacked in the basement. Tony rescues Lorraine, and Ed recovers. The possessed Judy, now in the attic, attempts to hang herself but is cut down by Ed. Lorraine again uses prayer to revive Judy, and the demon attacks them. Ed is unable to exorcise the mirror, and Lorraine resolves to tell Judy to embrace her psychic abilities. With Judy's help and through the recitation of the Prayer to Saint Michael, the Warrens destroy the mirror. The Smurls live in the house for three more years without further hauntings, and the remains of the mirror are kept within the Warrens' occult museum.
Sometime later, Judy walks down the aisle with Ed during her wedding to Tony. On the eve of the wedding, Ed and Lorraine embrace, and Lorraine shares a vision that she has about their future, excited to live the peaceful life they have always wanted.
