Dr. Sebastian Caine (Kevin Bacon), a brilliant but megalomaniacal molecular biologist, works on an invisibility serum for the U.S. military, as well as a means to revert the recipient back to visibility. Caine has been attempting to perfect the project for the last 4 years, and he conducts his experiments on animals kept inside a top-secret hidden military lab accessible only to him and his staff. His current project is reversing the invisibility effect on his test subject, a female gorilla named Isabelle. Working late one night on his desktop, trying to re-configure the molecular model of the irradiated protein that will revert Isabelle back to visibility, he solves the problem and quickly reports to the top members of his staff about his recent success.
Although he works on the serum virtually non-stop, he still finds time to obsess about his ex-girlfriend Linda McKay (Elisabeth Shue), another scientist on his team, who, unbeknownst to Sebastian, has been dating Matt Kensington (Josh Brolin), yet another team member. Sebastian and his team, which also includes animal vets Sarah Kennedy (Kim Dickens) and Carter Abbey (Greg Grunberg) and technicians Frank Chase (Joey Slotnick) and Janice Walton (Mary Randle) eventually do figure out how to get the serum to work on animals, bringing the gorilla back to visibility. In celebration, the team goes out to a fancy dinner where Sebastian makes a toast to the greatest science team in the world. Afterwards, the team eagerly looks forward to obtaining clearance for clinical trials on humans. Instead of reporting his success to the military, Sebastian inexplicably lies to the oversight committee including Dr. Howard Kramer (William Devane), and decides to test the serum on himself. After some initial difficulties, the procedure is a success. About seventeen hours later, Sebastian wakes up in pain from the light, realizing that he can see through his eyelids. Sebastian then goes through some lab tests. But when it comes time to bring him back to visibility after three days, the reversion fails and almost kills him. The team constructs a latex mask for Sebastian to wear around the lab, crudely approximating a human appearance. During this time, Matt discovers a promising way to make Sebastian visible again. A computer simulation, however, shows it would just kill him. Isolation and effective imprisonment in the lab begins to wear on Sebastian's patience. Disobeying Carter and his own orders, Sebastian heads back to his apartment. There, temptation gets the best of Sebastian, and he first spies on his neighbor (Rhona Mitra), and then rapes her. Sebastian returns to the lab just as the others were planning to go after him. Linda warns him that if he leaves again, she and Matt will tell Kramer what they did. Sebastian, not one to listen, uses some of the lab equipment to build a recording device to capture his heat signature in his quarters; the repeating image fools Frank into believing that he is still in the lab, when, in fact, Sebastian is out spying on Linda and Matt.
Sebastian is furious that Matt and Linda are together, and smashes their bedroom window. The two call Frank, who tells them that Sebastian is still in bed. Meanwhile, an enraged Sebastian returns to the lab, frustrated and angered at the thought of Linda and Matt together. Unable to stand the annoying bark of an invisible dog, Sebastian reassures the dog that he means no harm, then kills it with his bare hands by brutally smashing it against the cage wall.
The team soon discover that they have been watching a recording and that Sebastian has been getting out without their knowledge.
Linda and Matt go to Kramer's House and confess about their experiments with Sebastian. Kramer is disappointed, and tells them that they are fired from the project. He then attempts to call the military and inform them about Sebastian, but Sebastian has actually followed Linda and Matt to Kramer's house. Sebastian tricks Kramer into leaving the house and then drowns him in his own swimming pool.
The next day, Sebastian waits until all of the team is in the lab and then disables the phones and all of the elevator codes except for his own. He removes his clothing and latex mask and, invisible, begins to hunt them all down. Janice falls behind while the team searches for Sebastian and he strangles her with IV tubing. Linda, Matt, Sarah, Carter, and Frank learn what Sebastian is up to, realizing that they are the only ones who know what he has become, and therefore he is planning to kill them all. They hide in the lab while Matt and Carter take tranquilizer guns to go hunting for Caine in the empty hallways using thermographic imaging goggles. Matt shoots at a heat signature that turns out to be from a steam vent. When Matt turns around, Carter has been yanked into the air by Sebastian, who is on top of a pipe. Matt tries to shoot him, but Sebastian throws Carter toward a jagged edge, which hits hiscarotid artery. Sebastian almost kills Matt, but Linda drags him to safety. Sarah and Frank find the barely conscious and severely injured Carter. Sarah runs to the freezer to get blood for a transfusion, despite Frank's wishes. There, Sebastian corners her. She sprays the blood all over the room, rendering him visible. Sebastian tackles her and shoots her with her tranquilizer dart, then breaks her neck.
Linda and Matt find Frank tending to a dying Carter. Linda tells Frank that Carter is dead and to help them find Sarah. The three hurry to the freezer and find Sarah dead in the freezer room. Frank sprays a fire extinguisher to expose Sebastian, but Sebastian impales him with a crowbar. He then stabs Matt with the same crowbar, but doesn't hit any organs. Sebastian locks Linda and him in the freezer, setting the temperature to freeze, and leaves to let them freeze to death.
Sebastian puts on his latex mask and clothing, spending much time to ensure he looks near-human. Meanwhile, Linda dresses Matt's shallow wound with duct tape and then works out a way to escape from the freezer. Linda constructs an electromagnet using a defibrilator and other lab equipment, and uses it to open the door. She lights a fire to warm Matt and gathers the parts needed for a flamethrower. Sebastian goes to the lab and creates nitroglycerin to blow up the lab. He puts the nitro in a centrifuge, starts a timer and destroys the keyboard, so it can't be stopped. Just as he is entering the elevator to leave Linda appears and fires a crude blowtorch at him, setting him alight. His latex and clothes burning away, Sebastian barely manages to escape the flames. Linda uses the flamethrower to start the ceiling sprinklers, partially revealing him. The two fight; just as she is about to lose, Matt appears and hits Sebastian with the crowbar. Sebastian returns, and after a quick battle, is electrocuted. As the electricity courses through his body, Sebastian is rendered partially visible: his muscles, bones, and organs can be seen, but his skin and hair remain invisible. Linda and Matt find the nitro about to explode, and decide to abandon the lab, climbing up the elevator shaft. The lab explodes filling the shaft with fire. The two are almost out when Sebastian appears. He fights with Linda and gave her a last kiss for the sake of their ex-relationship before she finally kills him by grabbing the elevator cable and knocking the car loose, sending Sebastian into the inferno below.
Eventually, both Linda and Matt emerge from the burning laboratory with the medics tending to their injuries.
