Scotland, 1879. A priest from a nearby parish, Father Angelo (Ian Hanmore) leads a small army of fellow disciples of a strange evil to a quiet manor, where they attack the estate's owners, Sir Robert and Lady Isobel (Derek Riddell, Michelle Duncan) and their staff... an attack in which the disciples use strange, superhuman abilities...

The Doctor (David Tennant) has promised Rose (Billie Piper) a trip to 1979 London, to take her to a concert by the Blockheads, but sadly the TARDIS manages to land one century earlier (naturally) on the Scottish highlands, materializing right next to an armed traveling party and a horse-drawn coach, inside which is none other than Queen Victoria (Pauline Collins). Introducing himself as a scientist (using the name Dr. James McCrimmon) and Rose as a Eliza Doolittle-esque waif, the two join the caravan, which is en route to Balmoral castle, the Queen's usual trip via train having been waylaid by a mysterious accident on the tracks.

The caravan stops for the night at the home of Sir Robert, who attempts to dissuade them from entering, all the while watched by the mysterious Father Angelo and his men. Victoria, however, is not easily persuaded, and calls upon Robert - who says his wife is away visiting family, but who in actuality remains trapped along with the rest of the staff in the cellar guarded by something evil - for his hospitality. For a brief time, the Doctor and Rose join Victoria and her men in believing this is merely a stop for the night. That changes when Rose discovers a woman hiding in her closet: Flora (Ruthie Milne), one of the members of Lady Isobel's staff, who escaped the sinister evil creature guarding the prisoners below.

Before Rose and Flora can tell the others about what's happening, however, the Doctor is suddenly clued in, as a ghost story told by Sir Robert at the evening meal provokes Father Angelo. Victoria's guards have all been knocked unconscious by an additive in their tea, and Rose and Flora are taken down below, while the Doctor, Victoria, Sir Robert and the head of the Queen's guards, Captain Reynolds (Jamie Sives), head for the basement. They are all reunited to watch as a solitary man trapped in a cage, suddenly struck by moonlight, begins a transformation... into a werewolf.

The group escapes and flees, and the Doctor begins to put the story together. Centuries before, an alien craft crashed on Earth; nothing survived but cellular matter, which has affected one person in every generation... a consciousness passed from one person to another, growing in strength and manifesting itself through werewolves. Father Angelo and his people worship it; the Doctor, on the other hand, is quite convinced that while bullets cannot stop it, something can. As the werewolf continues its rampage through the house, something prevents it from entering the master study; the Doctor deduces that oil of mistletoe has been spread upon the walls, which somehow repels the creature. Victoria, meanwhile, reveals the package she is carrying with her: the Koh-i-noor Diamond, the famed, cursed diamond that the Doctor realizes is connected to this as well.

Suddenly, the Doctor puts the mystery together, and just as the werewolf begins its newest attack, killing Captain Reynolds, the Doctor, Rose, Sir Robert and Victoria flee to the manor observatory. There, Sir Robert's father's prized, uncompleted telescope sits. The Doctor realizes that Robert's father and Prince Albert, Victoria's late spouse, had known of the werewolf legend and had planned accordingly; Victoria was meant to come to this place with the diamond. Sir Robert gives his life to buy time, convinced that his final act will counter the treason he committed by cooperating with Angelo when his wife was threatened, while Isobel and her staff concoct more potions based on mistletoe to keep the creature at bay. The Doctor inserts the jewel into the telescope, which, impacted by moonlight, suddenly becomes a weapon that can be used to destroy the werewolf, which it does post haste.

In the aftermath, Victoria bestows honors upon the Doctor and Rose... but then, surprisingly, banishes them from her kingdom, informing them that they are no longer welcome because they bring death and destruction with them wherever they go. The two make their way back to the TARDIS, convinced that the bite of the werewolf passed to Victoria before it died, and that her bloodline carries the curse all over again, which humanity will eventually have to deal with. The TARDIS departs the Scottish plains.

Back at the manor, Queen Victoria bids Lady Isobel to keep open her manor, which she says will become their first line of defense against the nightmares she believes will come; it will become an institute that will protect Britain against even the Doctor himself. Her institute will be named after the manor itself... Torchwood.