Charles Lee Ray, a well-known serial killer and wanted fugitive, is seen running through the streets of Chicago. After he is fatally shot in a toy shop by a detective named Mike Norris, Charles transfers his soul into one of the 'Good Guy' dolls via a voodoo spell. This causes the shop to explode, and Mike find Charles's body.
The next day, a widow named Karen Barclay purchases the same doll (now known as Chucky) for her son Andy's sixth birthday. That night, Karen's co-worker and friend Maggie Peterson is killed when Chucky causes her to fall from the apartment window while she babysits Andy. Maggie had stopped Chucky from getting live updates on his ex-henchman Eddie Caputo, who abandoned Charles when he transferred his soul; she mistakenly thought Andy was disobeying her by not going to bed. As a result, the police search the apartment. Andy is deemed a suspect by Mike much to the annoyance of Karen, who orders Mike and the police to leave.