In 1954, U.S. Marshal Edward "Teddy" Daniels (Leonardo DiCaprio) and his newly assigned partner Chuck Aule (Mark Ruffalo), go to the Ashecliffe Hospital for the criminally insane on Shutter Island located in Boston Harbor. They are investigating the disappearance of Rachel Solando, a patient who apparently vanished from a locked room. Dr. John Cawley (Ben Kingsley), the head psychiatrist, explains that Rachel was institutionalized after drowning her three children. During the search for Rachel, Teddy sees a lighthouse but is told it has already been searched. He asks to see the hospital personnel files; Cawley refuses, but allows the Marshals to question the staff. They are frustrated to learn that Rachel's psychiatrist, Dr. Sheehan, left on vacation after her disappearance. That night, Teddy has a strange dream in which he sees his wife Dolores Chanal (Michelle Williams), who was killed in a fire two years earlier. She tells Teddy that Rachel is still on the island, as is Andrew Laeddis, the arsonist responsible for her own death.
In the morning, they interview patients from Rachel's group therapy sessions, one of whom distracts Chuck and warns Teddy to run. Later, Teddy reveals to Chuck his ulterior motive for taking the investigation. Andrew Laeddis was sent to Ashecliffe for his crime and then disappeared, motivating Teddy to investigate the institution. He met a former patient, George Noyce, who claimed that Ashecliffe experimented on patients. Teddy is determined to bring the institution down.