An elderly woman tells her granddaughter a bedtime story of where snow comes from, by telling her the story of a young man named Edward who has scissors for hands. As the creation of an old Inventor, Edward was a human-like boy who was in the penultimate stage of work. The Inventor homeschooled Edward, but suffered a fatal heart attack and died just as he was about to fasten hands on Edward.
Local Avon saleswoman Peg Boggs visits the decrepit Gothic mansion on the hill where Edward lives. She finds Edward alone   at first startled, but, upon realizing he means well and is virtually harmless, takes him to her home. Edward becomes friends with Peg's young son Kevin and her husband Bill. He later falls in love with the Boggs' beautiful teenage daughter Kim, despite her initial fear of him.
Peg's neighbors are impressed by Edward's adept hedge-trimming and hair-cutting skills, though an eccentric religious fanatic named Esmeralda and Kim's overbearing boyfriend Jim are fearful and contemptuous of him. Joyce, an ageing, unfaithful housewife in the Boggs' neighborhood, has become fascinated with Edward and suggests that Edward open a hair-cutting salon with her. While examining a proposed site, she attempts to seduce him in the back room, causing Edward to leave in a panic, and Joyce rumoring of him trying to rape her.
Wanting money for a van, Jim takes advantage of Edward's ability to pick locks to break into his parents' house to steal from his wealthy but bullying father. The burglar alarm sounds and everyone except Edward flees after he is trapped by the automatic locks triggered by the alarm, despite Kim's insistence that they return for him, as the police have him arrested. He is released when a psychological examination reveals that his isolation allowed him to live without a sense of reality and common sense. Upon questioning by Peg, Edward takes full blame for the robbery, and is scrutinized for his behavior, believed to have committed the robbery as earlier he was denied a bank loan for his hair salon. During Christmas, Edward is cast out by almost everyone except the Boggs family. When Edward returns home, he reveals that he knew it was Jim's house and that he did it because she asked him to, much to Kim's shock.
While the family is setting up Christmas decorations, Edward creates a large angel ice sculpture (modelled on Kim). The shavings create an effect of falling snow, which Kim dances under. Jim arrives and calls out to Edward, startling him, resulting in Edward accidentally cutting Kim's hand. Jim accuses Edward of intentionally harming her and attacks him which causes Kim who is finally fed up with Jim's jealousy towards Edward to break up with him. Edward runs away, wandering the neighborhood in a rage, ruining one of his earlier hedge works, pokes a hole in the tire on someone's car, and trims a bush in Esmeralda's front yard into the shape of the devil. However, when a shaggy puppy comes near, Edward calms down, smiles at the dog and give it a trim. While Peg and Bill search for Edward, he returns and finds Kim alone in the Boggs' house. She asks Edward to hold her, but he is afraid that he will hurt her again   she pulls his arms around her and they embrace. Jim returns to the Boggs' house in a drunken rage to confront Kim, forcing his friend to drive his van while inebriated. Kevin is almost run over, but Edward pushes him out of the way, cutting Kevin's arms and face, causing witnesses to think he is attacking him. Jim then attacks him furiously and Edward cuts Jim's right arm. When the police arrive, Edward flees to the mansion as the neighbors pursue.
Kim runs to the mansion, reuniting with Edward. Jim follows her and attacks them with a handgun, beating Edward severely, who refuses to fight until Jim strikes Kim across the face when she intervenes. Edward stabs Jim in the stomach and pushes him to fall out of a window to his death. Kim confesses her love for Edward and they share a kiss before saying goodbye. Kim tells the townspeople that Edward and Jim fought each other to death and tells them that the roof caved in on Edward, showing them a discarded scissor-hand from the Inventor's lab. The neighbors return home with Joyce feeling guilty for framing Edward and causing the neighbors to hate him.
The elderly woman finishes telling her granddaughter the story, revealing that she is Kim and saying that she never saw Edward again. She chose not to visit him because decades have passed and she wanted him to remember her the way she was in her youth. She believes that Edward is still alive, immortal because he is artificial, and because of the winter "snow" that Edward creates by carving ice sculptures that scatter shavings over the neighborhood, and remind her of dancing in the snow long ago.
Output: When Edward runs away in a rage, what calms him down?