In turn-of-the-century Sweden, cancer-stricken, dying Agnes is visited in her isolated rural mansion by her sisters Karin and Maria. As Agnes' condition deteriorates and pain management becomes increasingly more difficult, fear and revulsion grip the sisters, who seem incapable of empathy, and Agnes' only comfort and solace comes from her maid Anna. As the end draws closer, long repressed feelings of grudging resentment and mistrust cause jealousy, selfishness, and bitterness between the siblings to surface.

Late one night, a beautiful and well-dressed young woman, Grace, arrives in the mountainous old mining town of Dogville as a fugitive; following the sound of gunshots in the distance which have been heard by Tom, the self-appointed moral spokesman for the town. Persuaded by Tom, the town agree to hide Grace, and in return she freely helps the locals. However, when the Sheriff from a neighbouring town posts a Missing notice, advertising a reward for revealing her whereabouts, the townsfolk require a better deal from Grace, in return for their silence; and when the Sheriff returns some weeks later with a Wanted poster, even though the citizens know her to be innocent of the false charges against her, the town's sense of goodness takes a sinister turn and the price of Grace's freedom becomes a workload and treatment akin to that of a slave. But Grace has a deadly secret that the townsfolk will eventually encounter.