Plot
Amelia Vanek is a troubled, exhausted widow and single mother of six-year-old Sam living in Adelaide. Her husband, Oskar, was killed in a car accident while driving her to the hospital during labour. Sam begins displaying erratic behaviour, causing problems at school and in their social life, and becomes preoccupied with an imaginary monster, which he has built weapons to fight. One night, he asks his mother to read a pop-up fairy tale book, titled Mister Babadook. It describes a monster with a top hat wearing a suit, which grows more sinister and menacing with each page turned. Amelia is disturbed by the book and its mysterious appearance, while Sam grows frightened and paranoid, convinced that the Babadook is real.
Strange events begin to occur, such as Amelia finding glass shards in her food. She attributes the events to Sam, but he blames the Babadook. Amelia subsequently rips up the book and disposes of it. At her birthday party, Sam's cousin, Ruby, bullies him, and he pushes her out of her tree house, inadvertently breaking her nose. Amelia's sister and Ruby's mother, Claire, is furious at her nephew for what he did to her. Claire admonishes her sister, stating that even Amelia resents her son for his behavior. On the ride home, Sam has a vision of the Babadook and suffers a violent seizure, after which Amelia brings him to therapy and receives sedatives for him.
Amelia finds the Mister Babadook book reassembled at their front door. New words in it taunt her; the book now contains pop-ups of her killing their dog Bugsy, Sam, then herself. Terrified, she burns the book and runs to the police station after a disturbing phone call. However, she has no proof, and leaves when she sees what looks like the Babadook's suit hung up behind the front desk.
That night, the Babadook attacks her. After the attack, Amelia becomes more isolated and impatient, angrily shouting at Samuel and having more visions of the Babadook. She also exhibits violent behaviour, including cutting the phone line with a knife, and has disturbing hallucinations in which she sees herself murdering Sam.
An apparition of Oskar appears, offering to return if she "brings the boy" to him. Realising he is a creation of the Babadook, she flees, but the Babadook finally possesses her. Under its influence, she kills Bugsy and attempts to kill Sam. Eventually luring her into the basement, Sam knocks her out with his contraptions. Amelia awakens and tries to strangle Sam. When he lovingly caresses her face, she regurgitates a black substance, which seemingly expels the Babadook. However, Sam reminds her that "you can't get rid of the Babadook", and an unseen force drags him into her bedroom. She saves him but is forced to see a vision of her husband's death. Furious, she confronts the Babadook, making it retreat into the basement, locking the door in the process.
Amelia and Sam manage to recover. She is attentive and caring toward him, encouraging him to build his weapons and being impressed by his magic tricks. In the garden, they gather worms in a bowl, which Amelia takes to the basement. The Babadook tries to attack her, but she soothes it and it retreats to the corner, taking the bowl of worms with it. She returns to the yard to celebrate Sam's birthday.