On November 5, 1997, Evey Hammond, an impoverished sixteen-year-old orphan who has turned to prostitution out of a desperation to survive, tries to solicit a man on Guy Fawkes Night. The man turns out to be a Fingerman, a member of the state secret police. Evey watches helplessly as two more of his colleagues emerge from the darkness and announce their plans to rape and kill her. Suddenly, a mysterious cloaked figure wearing a Guy Fawkes mask rescues her using tear gas and a grenade disguised as a prosthetic hand.
The enigmatic figure, known as V, brings Evey to a safe distance then blows up the Houses of Parliament, destroying it completely and treating onlookers to a pyrotechnics display issuing from the smoldering ruins. V then takes Evey to the Shadow Gallery, his underground hideout, which is full of banned materials like art, music, and non-state approved literature. In the safety of the gallery, Evey shares her life story, narrating the sad circumstances of how she lost her parents during the nuclear war of the 1980s, which also decimated the existing order and led to the hyper-oppressive totalitarian Norsefire government that controls London.
The focus changes from Evey and V to Eric Finch, a seasoned police detective who heads the police force, which members of Norsefire colloquially refer to as The Nose. Finch scrutinizes V’s anarchistic activities, relaying his findings to Norsefire’s various intelligence departments such as The Finger, headed by Derek Almond, and The Head, managed by Adam Susan, the enigmatic Leader of the organization. The Leader compulsively supervises government activities through the guidance of Fate, a computer surveillance system that has cameras and microphones trained on the people of London.
Finch’s investigations take a series of interesting turns when V begins targeting key members of the Norsefire party. He first targets Lewis Prothero, head of Norsefire’s propaganda engine, driving him insane. Next, V pushes Bishop Anthony Liliman, the highly corrupt head of Westminster, to eat a cyanide-laced mass wafer after exposing him as a vicious pedophile. His next victim is the skilled doctor Delia Surridge, a medical researcher. Dr. Surridge was also Finch’s former lover and her death at V’s hands marks a turning point for him, causing him to reconsider his involvement in Norsefire. Being a capable detective, Finch manages to draw a connection between all of V’s targets: they all served as staff in a Larkhill Resettlement Camp.
Finch sends Almond to Surridge's house, but V manages to kill her before Almond arrives; he then stabs Almond in the hall when Almond discovers his gun is unloaded. Dr. Surridge leaves a journal that divulges—at least in part—V’s identity. Entries in the journal reveal that V was an inmate in Room Five at the Larkhill facility and a recipient of her inhuman medical experiments. V succeeded in destroying and escaping the prison camp and is now systematically executing former Larkhill officers, presumably for the atrocities they have committed. Detective Finch sends his findings to the Leader, who worries that all these seemingly personal vendettas may just be a prelude to a much larger, more crippling anarchist attack.
V’s next target is Roger Dascombe, head of The Mouth, the informal label given to Norsefire’s propaganda arm. V breaks into the Jordan Tower, forcing Dascombe to broadcast a speech urging the people to rebel against the government. V kills Dascombe and escapes. Finch is introduced to the new head of The Finger, Peter Creedy, who goads Finch into punching him. Finch goes on a forced vacation.
Evey Hammond, meanwhile, has been abandoned by V. She starts a relationship with an older man named Gordon. In time the pair come across Rosemary Almond, widow of Derek Almond, former head of The Finger. She was also involved with another Norsefire head, Roger Dascombe, after the death of Derek Almond. Now that both men are dead, she works as a stripper at the Kitty-Kat Keller.
The relative peace that Evey enjoys with Gordon is abruptly ended by Alistair Harper, a Scottish mobster being tapped by Creedy, a member of the Norsefire party. Creedy needs Harper to provide them with manpower—his thugs—in preparation for an uprising he is planning. Harper murders Gordon by stabbing him with a sword through his door. Evey attempts to avenge his death by shooting Harper outside the Kitty-Kat Keller, but she is captured and trapped before she can pull the trigger.
Evey is tortured and cross-examined nearly to the point of breaking. While imprisoned, she finds an old letter secreted in her cell wall. The letter was written by Valerie, a former actress who was imprisoned, tortured, and finally executed because she was a lesbian. The letter speaks of her defiance of the system and it moves Evey to endure her situation. Evey’s tormentor finally gives her an ultimatum: ally with the current régime or die by firing squad. Inspired by Valerie’s example, Evey defies her tormenters.
Evey then learns that her imprisonment was all an elaborate ruse set up by V to test her loyalty and provide her with insight into the pivotal incidences that birthed the V persona at Larkhill. V informs Evey that Valerie was a prisoner in Room Four, and that the letter provided him with the inspiration he needed to escape.
Evey forgives V for the abuses she received at his hands and V divulges the next step in his grand plan for vengeance: he has hacked into the Fate system and has begun to manipulate Adam Susan, playing with his emotions and mental condition through a series of intricate mind games. Subsequently, Adam Susan has begun to go mad; he feels romantically attached to Fate, fawning over its statements like a spurned lover.
The year is now 1998. On Guy Fawkes night V destroys three major government agencies: The Eye, The Ear, and The Mouth, killing a Norsefire party head, Brian Etheridge, manager of The Ear, in the process. In a conversation, V mentions that he seeks to achieve a working revolutionary society that he calls the Land of Do-as-You-Please, but he has not yet realized this dream. He muses that they are in a transitory social phase that he calls the Land of Take-What-You-Want.
While all of these events are going on, Finch and his protégé, Dominic Stone, have been busy piecing together clues from V’s activities. Dominic comes to the conclusion that V has somehow managed to hack into Fate and has been manipulating events all along, explaining V’s supernatural ability to predict Norsefire movements. Finch, attempting to uncover V’s identity and get a better handle on predicting his activities, heads off to the former Larkhill site. Once there Finch takes LSD in an attempt to gain insight into how V came to be. His gamble pays off when he infers that the Shadow Gallery is located in an abandoned Victoria line Underground station.
In the Underground station, Finch finds a train car full of flowers. V greets him by name and Finch fires four shots. Finch stabs his shoulder and defiantly claims that he cannot be killed, as he is an idea, and ideas are bulletproof. Finch gives up chasing after V; seeing the copious amounts of blood pooled on the floor, he assumes that V is now dead from excessive bleeding. V retreats into the depths of the gallery and dies in Evey’s arms. Evey briefly contemplates removing V’s trademark mask but decides against it, maintaining that V is not a person so much as an icon of their struggle for freedom. Evey then dons a different Guy Fawkes mask and assumes V's identity, continuing his legacy.
While Finch and V are fighting for their lives deep underground, within the ranks of Norsefire’s top officers, there is a jockeying for power between Creedy and Adam Susan. Creedy has been trying to compel Susan to make public appearances, as a show that they are still in control. His true intention is to expose him to danger, giving would-be assassins a chance to kill him. This ploy pays off: Adam Susan is shot in the head by a vengeful Rosemary Almond in retribution for the death of her husband and her lover and for the miserable life that she is now forced to live. Creedy takes up the mantle of leadership after Susan’s death. Finch proclaims that V is now dead; however, he pretends not to remember where V's hideout is. His experiences and the discoveries he’s made about V, Larkhill, and Norsefire lead Finch to resign from The Nose and live following no one's orders.
The death of Adam Susan leaves a power vacuum within Norsefire. Alistair Harper murders Creedy after having been seduced by Helen Heyer, wife of Conrad Heyer, who leads The Eye. Harper and Conrad Heyer kill each other, each having been manipulated by Helen. Dominic Stone assumes leadership of the peacekeeping police forces responsible for suppressing the riots and patrolling the streets as a precaution in case V should survive and make his awaited public address.
A crowd witnesses the appearance of V, who is in truth Evey; she announces that 10 Downing Street (the prime minister's residence) will be bombed the next day. She tells the crowd to choose what comes next: live lives of their own, or return to life in chains. The residents promptly reply with an uprising and rush the police. The next night, Evey gives V a Viking funeral by putting V's body in the underground train full of flowers and gelignite explosives. She sends it to a point on that track where V said it would be blocked with rubble, directly beneath Downing Street. She goes to the roof to watch the explosion, then descends to the Shadow Gallery where Stone has woken up. She introduces herself in the way V did to her, implying that she will begin grooming Stone as her successor. The story ends with Finch walking north out of London on the darkened and empty M1 motorway.