Yellowstone County, Montana, December 11th. The Rockwell family: mother, father, and two children, are killed by wolves.
The INS office is celebrating its first Christmas party in a very long time, during one of the worst winters in Chicago history. The purpose of the gathering is to bid farewell to Tony, who is taking a long overdue vacation – a cruise on the Hanover he's finagled the paper into purchasing, by proposing it as a feature article. Then the New York office calls: Tony must host visitors from New York and cannot take the cruise. He's desperate not to give the story (and cruise) to Kolchak, but with most of the office out sick, he has no choice. Carl jets to Los Angeles to board the Hanover.
Going aboard, Carl meets his roommate, Mel Tarter, who confuses Carl's place in the "Fourth Estate" (journalists) with the "Fifth Column" (Nazi spies and saboteurs). He also meets Wendy, Mel's girlfriend. Also checking in is Bernhardt Stieglitz, a NATO soldier who suffers from terrible nightmares and whose doctors have advised him to take a rest leave. George, a helpful steward, is in Stieglitz's cabin; George is a scrounger who can usually get whatever a guest might want, but what Stieglitz wants is peace and quiet.
As the full moon rises off the starboard bow, an angry Mrs. Lois Prysock of Eugene, Oregon, who has just lost fifty dollars to the slot machines, is seized by a monstrous furry creature and hurled over the rail.
At dinner, Mel and Wendy introduce Carl to Paula Griffin. Above, the monster has broken into the bridge and slaughters the watch. The constant blaring of the ship's horn tips Carl to the potential story, and when he sees the officers leave the dining room en masse he follows. A man posted by the stairs keeps Carl from going to the bridge; Carl tries to persuade this warder that he served with the captain, but the man doesn't buy it and sends him packing.
Returning to the main deck, Carl hears gunshots, growls, and the sounds of an extended fight. Following the sounds, Carl discovers a chaotic scene – men down, furniture smashed – and Gribbs, an officer who quickly hustles him away, claiming the area is off limits. This time, Carl's gift for chicanery doesn't fail him: he introduces himself as Carl K. Wells – the son of Captain Julian Wells. But Gribbs still won't let him through, telling him his father will report to him personally.
Carl's next destination is the radio room, but he has no luck there – they're "having a little trouble with the equipment" and no messages can be sent. Back at the dining room, Carl recruits Paula Griffin into helping him trick his way into the radio room. She distracts the operator so Carl can sneak in; Carl jots down some details from the dispatches.
The monster attacks two couples visiting an out-of-surface pool and lands among the couples, making short work of them.
Carl learns that the captain wants the passengers checked for police records, while maintaining security and silence about the incidents. Kolchak also learns the officers are considering returning to Los Angeles. Carl tries for a ship-to-shore call to Vincenzo. The operator tries, but before Carl can get through the sound of running feet lures him to the hall outside his stateroom. Crew are racing past and Carl races after them. They reach the first class pool and Carl manages a few pictures of the bodies in the empty pool before the monster attacks the officers and knocks him out.
Carl is taken to the infirmary where Stieglitz is already there as a patient. His chief complaint is a wound on his left arm, a bite that has not healed properly in two months. On top of that he has headaches and blackouts. The ship's doctor offers him pills, but Stieglitz isn't interested – before his rest leave, he was confined at the Billings Naval Hospital, and pills were no help to him there. The doctor suggests neuropsychiatric help and Stieglitz becomes irate. He's not interested in why he has nightmares; he only wants to stop them – now. Carl awakens in the next room, and discovers someone has taken the film from his camera. He overhears the doctor and Stieglitz conversing – Stieglitz wants narcotics and the doctor won't dispense them; Stieglitz dismisses him as a "babbling fool."
As Kolchak is preparing to leave the infirmary, Gribbs enters, calling him by name but telling him his "dad" would like to see him. Kolchak's imposture of Captain Wells' son has been discovered, and the officers aren't too pleased about it. Wells lays it out for him – Carl must cease annoying crewmembers, fomenting trouble among his fellow passengers, and misrepresenting himself as the captain's son. Carl's protest that the First Amendment gives him the right to inquire is met with a stony recitation of the Maritime Code – the part that lets Captain Wells "throw him in irons" if his actions are contrary to the best interests of the ship. During this lecture, a junior officer arrives with an the pictures developed from Carl's film, although Carl doesn't know it. Examining the photos, the officers conclude that Kolchak won't win any prizes for his photography – but that his subject is very startling.
Returning to the infirmary, Kolchak bumps Stieglitz in the passageway. Inside the infirmary, someone has broken into the drug cabinet…
Back in his cabin, Kolchak again tries for ship-to-shore. This time, the operator immediately informs him the lines are all busy – as they have been for the last two hours. And the operator addresses Carl by name… Paula enters, and reports that a long section of carpet near the lobby has been removed – Carl cynically replies that it's a waste of time: bloodstains cannot be removed. And she reports that she overheard two Italian stewards secretly discussing a "wolf man".
Paula's nearly encyclopedic knowledge of movies proves useful – she remembers that one can kill a werewolf with silver bullets. Unfortunately, there are no silver bullets on a cruise ship.
Stieglitz is preparing a rather large injection from a stolen vial. After injecting himself, he gathers some heavy chains and locks and prepares to lock himself down.
Carl has, with George's help, obtained several heavy iron pots. And with Mel and Wendy's help, he'll find the closest thing the ship has to a priest: a divinity school drop-out, who might just be able to supply a bit of Latin prayer.
Carl's theory that he is the only one denied ship-to-shore privileges is correct: Paula has no trouble placing the call from her cabin. Tony isn't happy to learn Carl wants background on mutilation murders. Worse, he has the flu but must come to work anyway because the rest of the office is sick. But Tony comes through, and the information is interesting – one month before this cruise, wolves attacked a family in Yellowstone County, Montana. And a month before that, a six-man NATO radar team in Greenland was attacked – and that time, there was a single survivor.
Carl meets George, who has continued scrounging for him; but George can only find silver-plated utensils from the dining room. There's only one place to get the necessary solid silver on board – the captain's dress uniform. George won't risk it, forcing Carl to visit the captain's cabin to get the buttons himself. Carl barely succeeds before Captain Wells surprises him. When he shares his werewolf theory, Wells' reply is more of the Maritime Code: this time, the part describing how a captain may deal with mentally unstable passengers. But Wells does allow that there were problems – problems suggesting a psychotic passenger, problems that have now stopped. Wells feels the situation has resolved itself, but Carl knows the problems will reappear when the full moon rises…
Back in his cabin, Carl improvises a crucible and is melting the buttons. Mel shows up with Jay Remy, the divinity school drop-out, who says a prayer for the dead over the pot of melted silver. George brings a shotgun and a box of shells.
Stieglitz, chained to his bed, is clearly having a terrible nightmare. But as his fingernails lengthen to claws and he bursts his chains, it's clear others will soon be sharing his nightmare. George the steward, hearing Stieglitz's frenzied yelling, knocks on his door. Getting no answer, he starts to walk away but the door bursts apart and the monster quickly finishes George.
Carl continues to make shotgun pellets while the crew chases the werewolf. Their normal lead bullets do no harm and it plows through the crew: Hallem, Gribbs, and many others are unable to stop it. Finishing his silver buckshot, Carl loads his shotgun and pockets the rest of the shells then joins the hunt. Carl spots the monster, chases it, catches another glimpse, and shoots wildly. It lurks in the shadows andCarl passes below its hiding place. It leaps, drawing a wildly inaccurate shot. Now empty, Carl races off to reload with the werewolf in pursuit. It loses Carl briefly, but a carelessly-dropped spent shell catches its ear and it's back after him. It catches up, but Carl has managed to reload and hits it twice. Bleeding, but not dead, it seizes Carl and tosses him over the railing. Clinging for his life, Carl manages to seize the weakened monster and pull it over the railing; it disappears into the moonlit sea.
At the end Carl reveals that everything was covered up – all traces of Bernhardt Stieglitz have been eliminated and the victims have been sent to Switzerland to undergo treatment for a "rare blood disease." The Hanover is scrapped, and Vincenzo refuses to publish the story.