A pair of red-trimmed off-white butterflies are found living in the land of Siberia. The insects are native to Japan, so scientists find it strange that they would be discovered so far away from their homeland. In response, an expedition is dispatched to their habitat, located along the Kitami River, to discover why the insects might be living in Siberia. Two members of the scientific community helm the expedition, but are mysteriously crushed by something that the police can only describe as "powerful." The nearby villagers of the Kitami River insist that the deaths were a result of the wraith of their mountain god: Varan.
Further intrigued, a larger expedition is then dispatched to the area. This time the investigation is funded by the film company "20th Century Mysteries Solved", an organization that seeks to uncover the truth behind the two deaths to report on it. Staff of the firm Yuriko and Horiguchi lead the expedition along with Kenji, a member of the scientific community. The expedition travels further inland and stumbles upon a village doing a ritualistic prayer to their mountain god. The priest of the village warns the travelers that their presence will make the monster angry. The warnings fall of deaf ears, though, and the problem escalates when Ken, a young local boy, runs out of the village after his dog. The villagers are warned not pursue, as the priest explains that such action would anger the mountain god. Kenji challenges the priest's warning, asking if their beliefs are worth endangering the life of a child. The three members of the expedition then decide to take matters into their own hands and rescue the boy. The trio is separated, however, in the thick fog. Kenji and Horiguchi return to the village to rally the locals to help them, telling them their beliefs are little more than superstition. The villagers, minus the priest, agree, and head toward the lake to rescue Ken. Once there, Ken, along with Yuriko, are discovered. Their reunion is cut short, though, by the monster Varan rising from the Kitami River. The villagers flee back to their homes, but Varan gives chase. The aquatic monster enters the village, killing the priest who was guarding the entrance. The beast then proceeds to tear apart the huts inside. After the destruction, the monster retreats to his underwater lair.
Reports of the creature's existence are sent back to Japan, and the defense force is mobilized near Kitami River to prepare for the beast's return. The nearby villages are evacuated, as tanks and ground artillery units move into position. Shortly after the evacuation, the military begins releasing toxins into the river to drive the monster out. The plan is a success, as Varan emerges from the water's surface. Phase two of the SDF's plan is put into operation, as tanks and artillery units began to unleash their destructive fury on the monster. The conventional weapons have no effect, though, and the military is forced to retreat. Amongst the confusion, Yuriko manages to get caught under a falling tree, placing her right in Varan's path. Kenji narrowly manages to save his colleague, though, and the two seek safety in a nearby cave. Varan pursues the two, reaching into the cavern with his claws. Luckily, the military intervenes, firing light bombs over the monster's head. Varan becomes attracted by the light, and climbs a nearby mountain in order to get a closer look. Once at the peak, though, Varan raises his arms to reveal hidden flaps of skins. The creature then leaps from the mountain and glides off into the sea.
As the next day breaks, Varan's reign of terror continues as he capsizes a fishing boat not far from Tokyo's shores. The defense force then remobilizes, sending a squadron of jets to intercept the creature. The aircrafts are met with little success, however, as Varan manages to sink one of them that ventures to close to the water's surface. Pleased with his success, the monster submerges and continues his descent toward Tokyo. The military moves into phase two of their counterattack, deploying battleships to the surrounding waters. Unfortunately, the battleship's artillery has no effect against the creature. Undiscouraged, the SDF quickly launches a third campaign to try and stop Varan's advancement, this time using mine sweepers to seal off Tokyo. The attack, like the rest, is met with failure, though. Out of options, the defense force again remobilizes its forces to the area around Tokyo bay, lining the water with battleships and dispatching a battalion of tanks near Haneda airport. A large amount of Special Gunpowder, which they hope will have better success at destroying the monster, is also readied. Tokyo is then evacuated, as the military awaits the appearance of Varan.
Day turns to night as Varan finally emerges from the water, ready to attack the Japanese mainland. The creature is immediately shelled by the surrounding forces, but that doesn't deter his advancement on land. Kenji, once again taking matters into his own hands, drives a truck filled with Special Gunpowder to the runway of Haneda airport. Varan advances on the small vehicle, as Kenji escapes to a safe distance. With Varan directly over the truck, the detonate trigger is pulled, causing the aquatic monster to fall flat on his stomach. The SDF celebrates prematurely, though, as the beast rises from the attack seemingly unfazed, and begins an assault on his hind legs. Light bombs are once again deployed to try and attract the monster, while the defense force witnesses Varan eating one of the flares. A new plan is then hatched, as they prepare light bombs filled with the Special Gun Powder. The bombs are unleashed, as the monster eats two of them out of the night sky. Shortly after, the first bomb detonates, causing the monster to retreat back to the sea. Varan is too late, though, as the second detonates as the creature is underwater and the defense force declares the creature dead.
In 1999, 41 years later, Varan is found living with the rest of Earth's monsters on Monster Land. When the Kilaaks take control of the island, and all of its inhabitants, Varan disappears as the alien invader's global assault is initiated. After the control is broken, Varan joins in the fight against King Ghidorah at Mount Fuji, but does not participate in the battle itself. Once the space demon is defeated, the spiked creature returns to Monster Land to live out his days with the rest of the kaiju.