In the early years of the 21st century, the Doctor brings Ace to Hexen Bridge, site of a brutal massacre on the eve of the English Civil War. Ostensibly he's come to attend a school reunion, as he's on the board of governors, but he admits to Ace that his real interest in the village lies in its isolation, the fact that no aerial photographs of the area have ever been taken, and the striking rate of suicides amongst the alumni of the school. Ace stays at the local inn, and befriends local schoolteacher Rebecca Baber and Steven Chen, son of the owners of the local Chinese restaurant.

At the reunion, the Doctor stumbles across two alumni -- Liverpudlian criminal Kenny Shanks and Britain's Minister of State for Defense, Matthew Hatch -- who are engaged in a gun-running operation. When they catch the Doctor spying, Shanks kidnaps him. Later, Hatch slips into a secret tunnel beneath the school and speaks with a man who appears in an antique mirror, dressed in 17th-century clothing. Hatch is also sleeping with Rebecca but doesn't realize she has ulterior motives for their affair. That night, masked men drag young hooligan Billy Tyley onto the village green, and the next morning Ace finds a scarecrow dressed in pyjamas staked down on the green like a sacrificial figure. Searching the village for the missing Doctor, Ace discovers that the TARDIS door has been blocked off by a cordon of immovable scarecrows.

The next day, Hatch learns that animal rights activists have bombed a research centre, and the investigation is threatening to expose his ties to it. Realizing that Rebecca must be responsible, he sends a thug to break into her home to find proof that she is connected to the bombing. Dr Bevan of the Wellton Clinic has been researching the "curse" of Hexen Bridge which renders the men of the village infertile if they leave the area, and Hatch decides to kidnap Rebecca so Bevan can use her in his experiments. Meanwhile, the man who broke into Rebecca's house sees alien tentacles writhing beneath the soil of Hexen Bridge and is attacked by a scarecrow when he investigates...

Ace convinces Steven Chen to help her break into the vicarage to study forbidden photographs, and finds evidence that a mysterious stain has been spreading over the fields for decades. As they try to leave the church they are attacked by scarecrows, and flee through the graveyard. Megan Tyley, emerging from her house to see what the noise is, is confronted by one of the scarecrows and recognizes it as all that's left of her son.

Liverpool's Chief Constable Thomas Denman, another Hexen Bridge alumnus, is getting close to exposing Shanks' criminal activities and arresting him, so Shanks straps a bomb to the Doctor and sends him to a nightclub to slip a package of drugs into Denman's daughter's handbag. The Doctor tries to warn her and foil Shanks' plans, but it turns out that another of Nicola's so-called friends is also working for Shanks, and both the Doctor and Nicola are arrested. The Doctor parries his interrogators' questions until he finally gets the chance to speak with Denman, but by then it's too late; strip-searched, humiliated, and thrown into a cell with a single blanket, Nicola realizes that this was done to her just to get at her father, and hangs herself in her cell. Denman, shattered, agrees to circumvent the law and help the Doctor break into Shanks' offices to find out what's really going on.

The Doctor discovers a link between Shanks, Hatch, and the Liverpool reservoir, but when he and Denman break into the reservoir they find that Shanks has already begun pumping some sort of chemical into the city's water supply. The Doctor shuts off the pump, and when Shanks tries to stop him Denman attacks and kills him. Denman and the Doctor go to London to confront Hatch, while random acts of violence begin occurring in Liverpool. Eventually they locate Hatch at the Wellton Clinic, where Bevan has completed his experiments and has developed a cure for the "curse". It seems the sterility is a side-effect of an alien mutation intended to liberate untapped psychic potential in the human mind; the violence in Liverpool is a side-effect, caused by people driven mad by the sudden onslaught of psychic reception. Hatch takes the drug, but due to his mental link to Hexen Bridge's legendary "Jack i' the Green", when his psychic potential is unleashed he is possessed by Jack's power. He drives back to Hexen Bridge, where Jack consumes him utterly and prepares to carry out the final stage of the plan.

Alien tentacles rise from the village green and scarecrows begin attacking villagers and feeding them to "Jack". The Doctor returns to Hexen Bridge for the final confrontation; by now he's realized that "Jack" is Jerak, the other half of a malfunctioning Hakolian war machine that landed on Earth during the English Civil War. He'd already defeated the other half of the machine, the Malus, some time ago, and thus Jerak's orders have changed. Jerak's attempts to genetically engineer psychic potential in humanity, to make them perfect slave subjects for the Hakolians, has backfired due to the side-effect of sterility, but now that Bevan has developed a cure Jerak will send the possessed Hatch out to spread the taint of insanity, murder and death. The process has already begun in Liverpool, and soon it will consume the world.

The Doctor is placed on trial by Jack's victims, representations of the souls Jack corrupted and absorbed into itself, but he manages to reach the humanity buried within them and they agree that even death would be preferable to the hollow existence they have now. Jerak realizes too late what's happening; the pagan legends it had drawn out of its captured souls to create the scarecrows are turned against it, and the Wild Hunt rises from the minds of the villagers to destroy the scarecrows and release the village from evil. A Huntsman leads Ace to the mirror, the gateway to Jerak's domain, which she smashes; this destroys Jerak once and for all, as well as killing Hatch before he can spread Jerak's taint further than the next village. The Doctor and Ace leave the cover-up of the incident to UNIT, while the survivors try to carry on with their lives.