The Enterprise is temporarily adrift in the Zed Lapis system during a realignment of the warp drive's dilithium crystal chamber and await Counselor Troi's return from a conference. Suddenly, they receive a distress signal from the shuttlecraft transporting Counselor Troi; it has crash-landed on the remote planet Vagra II. Once in orbit around the planet, Commander Riker beams down to the surface with Lieutenant Commander Data, Dr. Crusher, and Lieutenant Yar. The away team encounters a strange pool of black sludge near the downed shuttle that reacts to their movements and continually blocks their passage. When Data suggests that the sludge is an intelligent lifeform, the black pool affirms Data's suggestion and forms a vague humanoid shape. The creature identifies itself as Armus, then proceeds to taunt the away team for no reason. When Yar boldly heads for the shuttle, Armus hurls her across the plain with a psychokinetic blast. Riker and Data both fire their phasers at Armus, with absolutely no effect. As Armus retreats into the sludge, Dr. Crusher tries to stabilize Yar. When Captain Picard demands a report from on board the bridge, a stunned Dr. Crusher reports that Yar is dead.
The away team is immediately beamed back up to the Enterprise and they hurry to sick bay to try to save Yar's life. Dr. Crusher attempts several emergency techniques to revive her, but the synaptic damage is too extensive. Picard enters sick bay just before Dr. Crusher sadly announces that "she's (Yar) gone."
Inside the shuttlecraft, Armus taunts Troi with the news of Yar's death. Troi remains composed and tries to get into his head to find out what motivates him. Meanwhile, the crew discuss their options. Lieutenant Worf is promoted to Acting Chief of Security. The crew learn that Armus feeds on phaser energy and is capable of manipulating energy fields which can block their communications and transporters. Riker assembles another away team, this time bringing along Geordi La Forge, who hopes to use his VISOR to see things in Armus that escape normal vision. Armus is surprised at the crew members' determination to rescue their comrades. Troi then senses that Armus was left behind on Vagra II by "the others," a suggestion that enrages the creature. He accosts the new away team, this time toying with each of them out of sheer cruelty. When the away team eventually refuses to play along, Armus returns to the shuttle.
This time, Troi manipulates Armus into talking about the ones who abandoned him. He describes them as a race of titans whose beauty "now dazzles all who gaze upon them." The titans were able to purge everything evil and negative from their bodies and manifested it into a "skin of evil," the living creature Armus, which they shed and left on Vagra II. Troi offers her sincerest pity, which enrages Armus. He attacks Commander Riker and pulls him completely into the black sludge pool. He begins to torture Riker from within the pool, but Riker refuses to give in. Onboard the Enterprise, Worf discovers that when Armus envelops the shuttlecraft, the energy field that he emits dissipates almost to the point where Troi and shuttlecraft pilot Ben Prieto can be safely beamed up to the ship.
Troi can feel Riker's agony and begs Armus to release him, offering herself in exchange. Just then, Captain Picard, who has decided to confront Armus one-on-one, beams down to the planet. Armus releases Riker, and Picard orders the away team beamed back up to the ship. He then demands to speak with Troi, which Armus allows. Troi tells Picard that when Armus speaks to her, he is forced to face his loneliness and sadness, which drops his guard and, Picard deduces, the strength of his energy field.
Once Picard is outside again, Armus demands to board the Enterprise and leave Vagra II. Picard asks if it is because he wants to find the ones who left him there in the first place. Armus becomes angry, and Picard continues to fuel the creature's rage by heightening his feelings of loneliness. He then flatly refuses to give Armus transport. Armus, now screaming hysterically, cannot sustain his energy field, and the Enterprise transports Picard, Troi, and Prieto off Vagra II. The Enterprise destroys the shuttlecraft and declares Vagra II off-limits.
Back on the Enterprise, the crew assemble in the Holodeck. Picard announces that they are gathered to celebrate Yar's life and plays a pre-recorded simulation of her. The holographic Yar addresses each of the crew members in turn, telling each what she has learned from them and how profoundly they affected her life. After the conclusion of the service, Data believes that he has misinterpreted its meaning, saying that his thoughts are not of Tasha, but of himself, and how empty he will feel without her presence. He asks Picard if he missed the point, but Picard reassures him, "No, you didn't, Data; you got it."