Some time after the events of Dawn of the Dead, zombies have overrun the world. A woman named Sara sits in a white room, featureless save for a calendar on the opposite wall. As she approaches it, hundreds of undead hands burst out and lunge for her before she wakes up in the seat of a helicopter, revealing the event as a nightmare. She and three other survivors, John, Bill and Miguel, land the chopper in deserted streets of Fort Myers, Florida to search for other possible survivors. They try to call people with a megaphone, but only attract hordes of undead. The group returns to their base, an underground army missile bunker near the Everglades. The group is revealed to be part of a military-supported scientific team assigned by the remnants of the government to study the zombie phenomenon in the hopes of finding a way of stopping or reversing the zombification process. Their leader Major Cooper died while they were on the trip, leaving Captain Rhodes in charge.

Dwindling supplies, loss of communication with other survivor enclaves, and an apparent lack of progress in the experiments have already caused tension and loss of cohesion among the scientists and soldiers. Miguel, one of the soldiers and Sarah's lover, is on the verge of a mental breakdown due to stress and fatigue. He is attacked by fellow soldier Pvt. Steel after Pvt. Rickles is nearly killed during a specimen-wrangling mission at the base's underground zombie corral due to his inability to focus. Rhodes denies the team both equipment and duty leave, reacting to the desperation of the situation.

In the underground laboratory, Dr. Logan, the lead scientist on the project, has been secretly using the recently deceased soldiers in his experiments, much to Sarah's horror when she sees that the latest specimen is Major Cooper. Sarah warns Logan that Rhodes will kill them all if he finds out. Logan dismisses the idea and demonstrates that the zombies operate on primitive instinct alone, gaining no nutrition from the flesh they consume, and explains his theory that the zombies can eventually be domesticated. Both Rhodes and Sarah disagree with his theory, but thanks to Logan's clever explanation and confidence, he is permitted to continue.

The next day, Dr. Logan shows Sarah and Fisher his prize specimen—"Bub", an apparently docile zombie who seems to possess limited memories of his past existence, recognizing household items. During the demonstration, Bub's actions with an unloaded pistol anger Rhodes further, convincing him of the futility of the project.

During another specimen-wrangling mission, one of the zombies breaks free of its restraints and attacks Pvt. Miller, biting his neck and causing him to accidentally shoot and kill Pvt. Johnson. Miguel tries in a rage to kill it, but is bitten on the arm as a result. While Steel reluctantly executes Miller, Sarah quickly amputates Miguel's arm and cauterizes the wound in an effort to stop zombification. She, Bill, and John fend off the soldiers who arrive to kill him. Rhodes angrily declares that he is shutting the science operation down, and that all the zombie specimens are to be destroyed the next day.

After the soldiers depart, Bill and Sarah decide to get more painkillers for Miguel. They search Logan's private office for medication, and discover a tape recorder. As they listen to Logan's increasingly incoherent and disturbing recording, they find the severed, zombified head of Pvt. Johnson, gawking at them with wires plunged into his skull, proving that Logan has gone completely insane.

Convinced that both Logan and Rhodes have lost their minds, Sarah, Bill, Miguel and John decide to leave in the helicopter before someone else does. They stop by Logan's lab to see him feeding human flesh to Bub and, while it is made clear that they knew nothing about it, Rhodes chances upon them and opens the freezer. Finding the remains of his soldiers he summarily executes Logan and takes Sarah, Bill and another scientist, Dr. Fisher, hostage. Making their way to the corral, Rhodes orders John, the only one in the group who knows how to fly the helicopter, to take him and his soldiers out of the base, leaving everyone else behind. John refuses, so Rhodes shoots Fisher and forces Sarah and Bill into the specimen corral. Suddenly the elevator klaxon sounds, and as Steel and Rickles run to investigate, John knocks out Pvt. Torrez and Rhodes, takes their guns and makes off after Sarah and Bill, leaving the corral gate open. Steel finds that Miguel has taken the elevator to the surface, ripping out the controls and leaving them stranded inside, with the platform hand box now the only means of lowering the elevator again. As Rhodes and Torrez arrive, Miguel opens the perimeter gate to let in the zombies and lays down on the elevator platform while they devour him alive, lowering the zombie-covered elevator back down into the base as he dies. With zombies pouring into the bunker from both the elevator and the open corral, Rhodes abandons his men and retreats deeper into the complex. Rickles and Torrez are caught and torn apart, and Steel shoots himself in the head after being bitten by a zombie.

Meanwhile, Bub accidentally frees himself from his restraints and goes looking for Dr. Logan, only to find his dead body lying in the open freezer near the labs. Enraged, he picks up a discarded handgun and begins wandering the halls, where he eventually encounters Rhodes. Bub manages to shoot Rhodes several times, badly wounding him. As Rhodes tries to escape, he accidentally runs into a crowd of zombies and is eaten alive, while Bub mocks the dying Captain with an ersatz salute.

After fighting their way through the zombie-infested cave system, Sarah, John and Bill manage to climb up through the missile silo to the helipad, but as soon as they reach the vehicle, they are attacked by zombies inside the helicopter. Sarah suddenly awakens on a pristine stretch of beach near the helicopter, revealing the final attack was just another nightmare, and the three of them managed to escape after all. As John and Bill fish in the surf nearby, she takes out a homemade calendar and crosses off another day.