Betsy Connell (Frances Dee), a Canadian nurse, relates in a voiceover how she once "walked with a zombie."
Betsy is hired to care for the wife of Paul Holland (Tom Conway), a sugar plantation owner on the Caribbean island of Saint Sebastian. Saint Sebastian is inhabited by a small white community and descendants of African slaves. Betsy is told the story of how the Hollands brought slaves to the island, and that the statue of "Ti-Misery" (Saint Sebastian pierced by arrows) in the courtyard is the figurehead from a slave ship.
That night at dinner, Betsy meets Paul's half-brother and employee, Wesley Rand (James Ellison). While getting ready for bed, Betsy hears crying. When she investigates, a woman in a white robe walks towards her, her eyes staring. Betsy screams, waking the rest of the household. Paul takes charge of Jessica Holland, the woman Betsy is to care for. The next morning, Dr. Maxwell tells Betsy that Jessica's spinal cord was irreparably damaged by a serious illness, leaving her totally without the willpower to do anything for herself.
On her day off, Betsy encounters Wesley in town. While he drinks himself into a stupor, a calypso singer (Sir Lancelot) sings about how Jessica was going to run away with Wesley, but Paul would not let them go. Then she was struck down by the fever. Betsy meets Mrs. Rand (Edith Barrett), Paul and Wesley's doctor mother.
That night, at dinner, Paul tries to persuade Wesley to reduce his drinking (at Betsy's suggestion), but he accuses Paul of trying to impress Betsy and of driving Jessica insane in the first place.
Later, Betsy is drawn to the sound of Paul playing the piano. He apologizes for bringing her to the island and admits that he may have been the cause of his wife's condition. Betsy has been falling in love with her moody employer. She determines to make him happy by curing Jessica.
Betsy gets Paul to agree to try a potentially fatal treatment of insulin shock on Jessica, but it has no effect. Housemaid Alma (Theresa Harris) then tells her that a Voodoo priest cured a woman of a similar condition. Betsy takes her patient without permission through cane fields past a crossroads guarded by the towering figure of the eerie Carre-Four (a reference to the loa Maitre Carrefours) to the houmfort (a place where Voodoo worshipers gather).
There, they watch a man (the Sabreur) wield a saber during a ritual. People are given advice through a shack door by a Voodoo priest. Betsy is summoned inside, where she is shocked to find that the priest is none other than Mrs. Rand. Mrs. Rand explains that she uses Voodoo to convince the natives to accept conventional medical practices and tells Betsy that Jessica can never be cured.
Outside, the locals stab Jessica in the arm with the sword as a test. When she does not bleed, they are convinced she is a zombie. Betsy takes her back to the house, but the natives demand that Jessica be returned to them for "ritual tests". Later, Carre-Four approaches the residence, but Mrs. Rand orders him to leave.
Paul suggests that Betsy return to Canada, as he is fearful of demeaning and abusing her as he did Jessica. She is convinced that he is not really like that.
The next day, Doctor Maxwell reports that the unrest has sparked an official inquiry into Jessica's illness. Mrs. Rand shocks everyone by claiming that Jessica is a zombie. Although she had never taken Voodoo seriously, Mrs Rand reveals that when she discovered that Jessica was planning to run away with Wesley and break up her family, she felt herself possessed by a Voodoo god. She then put a curse on Jessica. Paul, Maxwell and Betsy dismiss her story, but Wesley becomes obsessed with freeing Jessica from her zombie state. He asks Betsy if she would consider euthanasia, but she refuses.
Using an effigy of Jessica, the Sabreur takes control of her and draws her to him. Paul and Betsy stop her the first time, but they are not around when he tries again. Wesley opens the gate, letting Jessica out. Then he pulls an arrow out of the statue of Ti-Misery and follows. As the Sabreur stabs the doll with a pin, Wesley thrusts the arrow into Jessica. He then carries her body into the sea, pursued slowly by Carre-Four. Later, the natives discover the bodies of Jessica and Wesley floating in the surf. Paul comforts Betsy.

Question: What made the supersticious locals think that Betsy was really a zombie?
Answer: She was stabbed in the arm with a sword and didn't bleed from the wound.
Alternative answer: She didn't bleed.