As the summer season starts for the popular beach town Amity Island, a group of locals are having a drug-fueled party when Chrissy Watkins grabs another party-goer for skinny-dipping in the ocean. The man is already drunk and passes out on the shore while Chrissy heads in, where shes briefly tugged under, then violently dragged across the surface screaming in agony, before she finally disappears.
The next morning, Chrissys partner reports her disappearance to Police Chief Martin Brody, a new arrival from New York who has a phobia of the ocean. They find Chrissys horribly mutilated body washed up on shore, and Brody determines it was likely a shark and sets about closing the beaches. Hes quickly stopped by Mayor Larry Vaughn, who stresses that the town is dependent on summer tourism which will vanish if word gets out about the incident. Brody reluctantly agrees to instead write up the death as a boat accident and keep the beaches open.
As the beach fills up, Brody keeps a wary eye on the water, and indeed after several false alarms a young boy named Alex Kinter is devoured in the middle of the crowd, who are sent racing out of the water. Alexs mother puts out a sizable bounty on the shark which draws various fishermen from all over, plus an offer from the especially colorful local Ned Quint to bring it in himself for even more money. Brody also calls the Oceanographic Institute and gets the help of ichthyologist Matt Hooper.
One of the hunting groups catches a large tiger shark, but Hooper determines its mouth is the wrong size for the wounds on Chrissys remains. He drags Brody onto the water where they find the boat of local fisherman Ben Gardner seemingly abandoned. Hooper finds a large shark tooth in the boat, but is then startled by the appearance of Gardners body and drops it, though from his brief look he identifies the shark as a Great White, the most dangerous species of all. Without the tooth as evidence, however, Vaughn continues to insist the beaches stay open for the 4th of July.
Tourists crowd the beach on Amitys biggest day of the year, though many are reluctant to go in the water until Vaughn has to pressure the locals to get the ball rolling. After a prank by kids with a fake fin sends everyone running out, the shark instead invades the quiet pond area, nearly attacking Brodys son Michael before it instead goes after another man before leaving. After the disaster, Vaughn is left reeling that he put his own children in danger, and easily agrees to hire Quint.
Brody and Hooper join Quint on his boat, where theyre both quickly annoyed by his salty condescension, though Hooper does form something of a bond over their shared love of the ocean that leaves Brody the one on the outside. After hours of chumming the water, the shark suddenly appears right next to the boat, leaving them all stunned at just how huge it is before Quint shoots a buoyancy barrel into it to create lift and drag, making it easier to hunt. That night, Quint shares the source of his hatred of sharks: he was a member of the USS Indianapolis crew who delivered the atomic bomb to be dropped on Hiroshima, only to then be sunk and almost entirely killed by sharks before they were rescued.
Over the following days the shark turns the tables and becomes the hunter, proving itself able to dive even with two more barrels attached, and damaging the boat beyond repair so that it slowly starts to sink. Hooper makes a last-ditch effort to go into the water in an anti-shark cage and give the shark a fatal injection, but it again outsmarts him and attacks from behind causing him to drop the harpoon, though Hooper manages to escape the cage and hide behind some coral. Back on the surface, the shark flops onto the rear of the boat and hastens its sinking, causing Quint to lose his grip and fall right into its mouth, even his desperate stabs at its face with a machete hopeless to save him. Left alone, Brody remembers a warning Hooper gave about how his diving tanks could blow up and throws one into the sharks mouth. With only the ships mast left above water, he opens fire with a rifle as the shark makes one last approach, finally hitting the tank and destroying it. Hooper soon comes back to the surface, and they rig a paddleboard from the boats remains to get back to shore.