The film opens with Michael (Noam Jenkins), a police informant, finding himself ensnared in a deadly trap created by the Jigsaw Killer (Tobin Bell). A videotaped message informs him that a Venus flytrap-like helmet full of spikes has been locked around his neck and will close on his head unless he finds the key in time. Michael realizes, through hints left by Jigsaw, that the key has been implanted behind his right eye. He finds a scalpel nearby, but cannot bring himself to cut out his own eye. When the timer runs out, the device slams shut, killing him instantly.
After arguing with his rebellious teenage son Daniel (Erik Knudsen), Detective Eric Matthews (Donnie Wahlberg) is called to the scene of yet another death perpetrated by Jigsaw on account of his name being written on the wall. Noticing that a padlock on the iron maiden-like device around the victim's neck bares a Wilson Steel logo, he gathers a SWAT team and arrives at the company's abandoned factory, which has now become another lair of Jigsaw's. A set of computer monitors shows several people trapped in a mysterious house, with Daniel among them; a timer is also present, with less than two hours left. Considerably weakened by his rapidly-advancing brain cancer, Jigsaw informs detective Mathews that he will see his son in a "safe, secure state" if he can sit in the room and converse with him long enough.