Seong Gi-hun is down on his luck, having accumulated enormous debts with loan sharks while becoming estranged from his daughter and ex-wife. At a train station, he is asked by a well-dressed man to play a game of ddakji for money. The man gives Gi-hun a card, inviting him to play games with higher stakes. Gi-hun accepts, is knocked unconscious, and taken to a mysterious location with 455 other players who awaken in a dormitory and are identified by numbers on their tracksuits. The location is managed by masked staff in pink jumpsuits and overseen by the Front Man, masked and dressed in black. The players are all in dire financial straits and will be given billions of won in prize money if they win six games over six days. Gi-hun befriends Player 001, an elderly man suffering from a brain tumor, and recognizes among the players Cho Sang-woo, a childhood classmate of his which has become an investment broker, and Player 067, a pickpocket who stole Gi-hun's money after he won a horse race wager. The first game is Red Light, Green Light, where those who lose are killed on the spot, revealing the sadistic nature of the games. Gi-hun is saved from falling by Player 199, a Pakistani foreign worker, and is able to complete the game.

More than half of the players are killed in the first game, and a few horrified survivors beg to leave. According to the third clause of the game's agreement, if the majority vote to end the games, all players will be sent home but no money will be given. The players vote, and Player 001's deciding vote has all of them sent home safely. Gi-hun goes to the police but no one believes him except Detective Hwang Jun-ho, whose missing brother received the same invitation card as Gi-hun. All players are given the chance to return to the games and many do so due to desperation, including Gi-hun, whose mother needs surgery; Sang-woo, who is about to be arrested for financial fraud; Player 001, who does not wish to die on the outside; Player 067, who wishes to rescue her parents from North Korea and get her little brother out of an orphanage; Player 199, who attacked and gravely injured his boss for withholding his wages for months; and Player 101 (real name Jang Deok-su), a gangster on the run from gambling debts. Jun-ho secretly follows Gi-hun when he is picked up by the game staff.

Jun-ho successfully infiltrates the games by disguising himself as a masked worker, and it is revealed that the location is a remote island. The players are now more prepared and start forming alliances. Gi-hun, Sang-woo, Player 001, and Player 199 team up. Player 067 explores an air vent and witnesses workers melting pots of sugar. In the second game, the players are to pick a stamped shape out of a dalgona. Sang-woo recognizes the game after learning from Player 067's discovery, but does not warn his teammates and chooses the simplest shape for himself. Gi-hun ends up picking the most difficult shape, an umbrella, but is able to complete the game by licking the honeycomb to melt it. Player 212, a rowdy and manipulative woman, helps Deok-su complete the game with a smuggled lighter. A scared player takes a staff member hostage and forces him to unmask himself. Shocked that the staff member is only a young man, the player kills himself and the staff member is killed by the Front Man for revealing his identity. Player 111, a disgraced doctor, secretly works with a handful of staff to harvest organs from dead players to sell on the black market in return for information on upcoming games. Gi-hun realizes that Sang-woo could have helped their team in the dalgona game but remains quiet. The staff foment discord among the players to weed out the weak ones. Deok-su kills another player over food, which results in the prize money being increased. After lights out, a riot erupts and more players are killed. Player 067 joins Gi-hun's team, who protect her from Deok-su's gang. When Player 001 begs everyone to stop, the Front Man ends the riot. Gi-hun's team exchange names to build trust: Player 199 is Ali Abdul, and Player 067 is Kang Sae-byeok. Player 001, due to his brain tumor, has trouble remembering his name. Player 212 (real name Han Mi-nyeo) has sex with Deok-su in exchange for protection. In the third game, players are told to form groups of 10. Sae-byeok recruits Player 240, a girl close to her age. The game is revealed to be a tug of war on two raised platforms, where a team wins by dragging the opposing team off their platform and to their deaths. Deok-su, learning about the game from Player 111 beforehand, picks only strong men and rejects Mi-nyeo, who joins Gi-hun's team. After Deok-su's team wins their match, Gi-hun's team struggles against another all-male team and is on the verge of defeat. In spite of having weaker players, Gi-hun's team manages to win their tug-of-war match with Player 001's strategy and Sang-woo's quick thinking. Anticipating another riot, they build a barricade and spend the night taking turns on guard, but Deok-su's team doesn't attack. Gi-hun reminisces on a similar situation from ten years ago, when he and many other workers from a car parts factory protested a mass lay-off, which caused the failed trajectory of Gi-hun's life. Jun-ho witnesses the organ harvesting racket, as the staff member whose identity he stole was part of it. Save Jun-ho, everyone involved in the racket is eventually killed, including Player 111.The Front Man begins a facility-wide manhunt for Jun-ho, who later breaks into the Front Man's office; he learns that the game has been running for over 30 years, and that his brother Hwang In-ho was the winner in 2015.

The players are instructed to proceed to the game hall where they see Player 111 (the Doctor) and his co-conspirators' bodies strung up and receive an apology, as Player 111 had an unfair advantage due to the games being prided on treating everyone equally, regardless of their status in the outside world. For the fourth game, players are told to pair up. Sang-woo, who is close with Ali, picks him; Gi-hun, who has compassion for Player 001, chooses him; Player 240 picks Sae-byeok. Expecting that they will be working with their partner, the players are horrified to learn that they will actually be playing against their partner in a marble game of their choice, and whoever gets all their partner's marbles within 30 minutes will win and survive. Sae-byeok and Player 240 (real name Ji-yeong) talk about their lives; Ji-yeong decides that Sae-byeok has more to live for, and intentionally loses the marble game to be killed. Sang-woo tricks Ali into giving up his marbles and wins, letting Ali be killed. Gi-hun, about to lose, turns the game around by using Player 001's failing memory against him, even though doing so unnerves him. Player 001 reveals that he knew Gi-hun was tricking him the whole time, but allows Gi-hun to win anyway as he is his gganbu (trusted friend). Before being killed, 001 remembers his name: Oh Il-nam. Gi-hun, Sang-woo, and Sae-byeok are all traumatized by the deaths of their partners. Player 069, who defeated his wife in the marble game, is heartbroken and commits suicide. Foreign VIP guests arrive and are welcomed by the Front Man on behalf of his boss, who is the host. The VIPs are wealthy patrons who wager on the games and watch them live. Jun-ho, now posing as one of the masked servants, is sexually propositioned by a VIP. In a private room, he attacks the VIP and interrogates him for info, recording the VIP's confession on his phone before escaping the island with a scuba kit. The Front Man spots him and pursues him. In the fifth game, the players have 16 minutes to cross a high bridge with panels made of either tempered or regular glass, the latter of which cannot support their weight. Most players at the front of the line fall to their deaths as the panels are tested. When Deok-su gets to the front, he refuses to move despite the clock ticking. Mi-nyeo grabs him and, as revenge for betraying her, takes him down with her to their deaths. Sang-woo angrily pushes Player 017 when he takes too long, killing him to reveal the last trick panel. Gi-hun, Sang-woo, and Sae-byeok are the only three to complete the game. As finalists, Gi-hun, Sang-woo, and Sae-byeok are given a change of clothes and a fancy steak dinner. It is revealed that Sae-byeok was badly wounded in the previous game, having been stabbed by a piece of flying glass when the bridge shattered, and is swiftly bleeding out. When dinner is cleared, each of them is left with a knife. After lights out, Gi-hun suggests to Sae-byeok that they should ally against Sang-woo, realizing he will go to any length to win. Sae-byeok instead begs Gi-hun to promise that whoever wins the game will look after the other's loved ones. Gi-hun goes to kill Sang-woo when he falls asleep but Sae-byeok stops him, telling him he is not a murderer. Sae-byeok's injuries worsen, prompting a desperate Gi-hun to run and call for help. Sae-byeok is killed by Sang-woo when Gi-hun is away, and the staff arrive only to collect her body. Meanwhile, Jun-ho makes it to another island but is quickly tracked down by the Front Man and the staff. To Jun-ho's shock, the Front Man reveals himself to be his brother, In-ho. In-ho shoots Jun-ho in the shoulder, causing Jun-ho to fall over a cliff and disappear into the water.

As finalists, Gi-hun, Sang-woo, and Sae-byeok are given a change of clothes and a fancy steak dinner. It is revealed that Sae-byeok was badly wounded in the previous game, having been stabbed by a piece of flying glass when the bridge shattered, and is swiftly bleeding out. When dinner is cleared, each of them is left with a knife. After lights out, Gi-hun suggests to Sae-byeok that they should ally against Sang-woo, realizing he will go to any length to win. Sae-byeok instead begs Gi-hun to promise that whoever wins the game will look after the other's loved ones. Gi-hun goes to kill Sang-woo when he falls asleep but Sae-byeok stops him, telling him he is not a murderer. Sae-byeok's injuries worsen, prompting a desperate Gi-hun to run and call for help. Sae-byeok is killed by Sang-woo when Gi-hun is away, and the staff arrive only to collect her body. Meanwhile, Jun-ho makes it to another island but is quickly tracked down by the Front Man and the staff. To Jun-ho's shock, the Front Man reveals himself to be his brother, In-ho. In-ho shoots Jun-ho in the shoulder, causing Jun-ho to fall over a cliff and disappear into the water. The final game is the eponymous Squid game. After a long and brutal fight in the rain, Gi-hun defeats Sang-woo but refuses to complete the game. He attempts to invoke the game's third clause so that he and Sang-woo can leave alive, but Sang-woo stabs himself in the neck. As he dies, Sang-woo asks Gi-hun to use the prize money to help his mother. A traumatized Gi-hun returns home to find his own mother has passed away. A year later, Gi-hun remains traumatized and has barely touched his prize money. One night he receives a game invitation card; to his shock, he finds Oh Il-nam (Player 001) still alive but dying from his brain tumor. Il-nam is revealed to be the mastermind behind the game, which he created to entertain the bored ultra-rich like himself while testing if humanity had any innate goodness left in it. He reminds Gi-hun that despite allowing the players to leave, many returned willingly. The specific games are based on Il-nam's childhood, and he had participated himself for nostalgia's sake. As they talk, the two see an unconscious man lying on a street corner; Il-nam asks Gi-hun to bet if someone will come help him before midnight. Gi-hun wins and Il-nam dies, presumably after witnessing his loss. Gi-hun fulfills his promises to Sae-byeok and Sang-woo, and leaves for the airport to reconnect with his daughter in Los Angeles. En route, he sees someone playing ddakji with the same game recruiter who found him. He angrily snatches the player's card, and before boarding his plane he calls the card's number, demanding to know who is still running the games. The Front Man orders him to get on the plane; Gi-hun ends the call and stays in Seoul, determined to stop the games once and for all.