Seong Gi-hun is down on his luck, having accumulated enormous debts with loan sharks. While at a train station, he is asked by a well-dressed man to play a game of ddakji for money. After playing, the man gives Gi-hun a card, inviting him to play games with higher stakes. Gi-hun accepts and is taken, while unconscious, to a mysterious location with 455 other players who awaken in a dormitory and are identified by numbers on their clothes. The location is managed by masked staff and overseen by the Front Man, also masked. The players are all in similarly 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, and recognizes among the players Cho Sang-woo, a former classmate and businessman, and Player 067, a pickpocket who stole his money. The first game is Red Light, Green Light, where those who lose are gunned down on the spot. Gi-hun, though terrified, is encouraged by Sang-woo to play, and is saved from falling by Player 199. All three are able to complete the game.

More than half the players were killed in the first game, and some survivors beg to leave. According to the third clause of the game's agreement, if the majority agree to end the games, all players will be sent home. The players vote, and Player 001's deciding vote has all of them sent home safely. Upon returning, Gi-hun goes to the police but no one believes his story except Detective Hwang Jun-ho, whose missing brother received the same card as Gi-hun. The game staff give the players the chance to resume playing, and many return, including Gi-hun, whose mother needs a medical procedure; Sang-woo, who is about to be arrested for financial fraud; Player 001, who has terminal brain cancer; Player 067, who wants to smuggle her parents out of North Korea; Player 199, who attacked his boss for withholding wages; and Player 101, a gangster on the run. Jun-ho secretly follows Gi-hun when he is picked up by the game staff.

Jun-ho hides among the masked staff as they travel to the game's island location. After waking up in the dorms, the players are more prepared and start forming alliances. Gi-hun, Sang-woo, Player 001, and Player 199 team up, and note that most players returned, including Player 212, who was the first to beg to leave. Player 067 sneaks into the vents and observes staff workers in a kitchen. In the second game, the players are to pick a stamped shape out of a dalgona. Sang-woo identifies the game quickly, using information from Player 067, but does not warn his teammates and picks the simplest shape for himself. Gi-hun completes the game despite having the highest difficulty shape, an umbrella, by licking the honeycomb to melt it. Player 212 helps Deok-su complete the game with a smuggled lighter. A player takes a higher-ranked staff member hostage before killing himself; the staff member is killed, and Jun-ho takes the new mask.

Player 111, a doctor, is given information of each game beforehand, and is working with a handful of staff to harvest organs from the dead players. He joins Deok-su's team by offering game info. Gi-hun realizes that Sang-woo could have helped their team in the previous game. The staff foment discord among the players and Deok-su kills another player, which only results in the prize money being increased. After lights out, a riot erupts and numerous 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 sends his soldiers to end the riot. Gi-hun's team exchange names: Player 199 is Ali Abdul, and Player 067 is Kang Sae-byeok. Player 001, who has a brain tumor, seems to have trouble speaking and remembering his name. After lights out, the guard in the room next to Jun-ho sends him a message by coughing in Morse code. In the third game, players are told to form groups of ten. Deok-su, knowing that the upcoming game is tug of war, picks strong men and rejects Player 212, Han Mi-nyeo, who has to join Gi-hun's team of weaker players.

Gi-hun's team win their tug of war match using Player 001 and Sang-woo's strategies, but most of them are unnerved at having to kill the opposing team. Expecting another riot, Gi-hun's team builds a barricade, which Deok-su mocks until Gi-hun points out that Deok-su's teammates have to turn on him sooner or later. That night Gi-hun's teammates take turns on watch, but Deok-su's team does not attack. Jun-ho learns about the conspiracy with Player 111 for black market organ harvesting, but the conspiracy ends when the Front Man catches them. Front Man executes the remaining members of the conspiracy, including Player 111, and has a facility-wide manhunt for Jun-ho. Jun-ho breaks into the Front Man's office and learns that the game has been running for over 30 years, and that his brother, Hwang In-ho, was the winner in 2015.

Jun-ho secretly watches the Front Man receive a call, saying that all will be settled before the VIPs arrive. For the fourth game, players are told to pair up. Sang-woo is with Ali, Gi-hun with Player 001, and Sae-byeok with Player 240. As there are an odd number of players, Mi-nyeo is last woman standing and taken away. In the game, everyone is told to play a marble game of their choice against their partner, and whoever gets all their partner's marbles within 30 minutes will win. Sae-byeok and Player 240, Ji-yeong, agree to play a simple all-or-nothing game, but after talking about their lives Ji-yeong decides Sae-byeok has more to live for and lets her win. Sang-woo almost loses, but tricks Ali into giving up his marbles and wins. Gi-hun, about to lose a betting game to Player 001, turns it around by using Player 001's failing memory against him. Player 001 reveals that he knew that Gi-hun was tricking him the whole time despite his failing condition, but allows Gi-hun to win anyway. Before being killed, Player 001 tells Gi-hun he is his gganbu, a trusted friend, and says that his name is Oh Il-nam.

The players return to the dorm where Mi-nyeo is waiting, having been allowed to sit out the game. Player 069, who beat his wife in the marble game, commits suicide. The VIPs arrive and are welcomed by the Front Man on behalf of his boss, the host. The VIPs are wealthy patrons who gamble on the games. Jun-ho, who is posing as one of the masked servants, is sexually propositioned by one of the VIPs. In a private room, Jun-ho interrogates the VIP for info and escapes the island with a scuba kit. In the fifth game the players, in predetermined order, have 16 minutes to cross a bridge made up of panels of either tempered glass, or normal glass which can't support their weight. The players at the front of the line fall to their death as the panels are tested. When Deok-su gets to the front of the line, he refuses to move; Mi-nyeo grabs him and they fall together. With four players left, Sang-woo pushes Player 017, killing him to reveal the last trick panel. Gi-hun, Sang-woo and Sae-byeok complete the game.

As finalists, Gi-hun, Sang-woo and Sae-byeok are given a change of clothes and a fancy dinner. When the dinner is cleared, each is left a knife. After lights out, Gi-hun asks Sae-byeok that they team up against Sang-woo, but Sae-byeok was injured in the stepping stones game and suggests that they promise to help each other's loved ones if they win the game instead. Sae-byeok's injuries worsen and Gi-hun runs to get help, but when the staff arrive Sae-byeok is dead; Sang-woo took the opportunity to stab her when Gi-hun was away. Jun-ho makes it onto another island and calls his chief, but the reception is poor. Front Man and his soldiers hunt Jun-ho down, and Front Man reveals himself to be In-ho, Jun-ho's brother. In-ho shoots Jun-ho and lets him fall into the sea.

The sixth and final game is the Squid game, with Gi-hun on offense and Sang-woo on defense. Gi-hun beats Sang-woo, but refuses to complete the game. He invokes the third clause to end the game, but Sang-woo stabs himself and asks Gi-hun to use the prize money to help Sang-woo's mother. Gi-hun returns home to find that his own mother has died. A year later, Gi-hun is still traumatized by his experience and has barely touched his prize money. One night he receives a gold game invitation card, and in answering it finds Player 001, Oh Il-nam, still alive but dying. Il-nam is one of the VIPs, the "Host" (who co-ran the game alongside the Front Man, In-ho), and the mastermind behind the game's operation, which was made to entertain the bored super rich like himself. Il-nam explains that both the poverty-stricken and uber-wealthy lead monotonous lives and he was trying to find a way to derive enjoyment from life. He was also testing whether humanity had any innate goodness left in it, reminding Gi-hun that despite witnessing the bloodshed in the initial game, he and the other participants still returned and sacrificed each other's lives for the sake of earning the prize money for themselves. The specific games are based on Il-nam's childhood memories, and he decided to participate himself for nostalgia's sake. Il-nam asks Gi-hun to play one last game with him, another test to see if humanity has goodness left in it – whether anyone will help a drunk man on the street before midnight; Gi-hun wins but Il-nam dies, though presumably not before he witnesses his loss. Gi-hun snaps out of his stupor and fulfils his promises: he gets Sae-byeok's brother out of the orphanage and gives Sang-woo's mother his share of the prize money. Gi-hun is about to leave the country to reconnect with his daughter, but on the way sees someone playing ddakji with the same game recruiter who invited him. Gi-hun takes the man's card and calls the number, now determined to find out who they are.