Lawrence Stewart "Larry" Talbot (Lon Chaney, Jr.) returns to his ancestral home in Llanwelly, Wales to reconcile with his father, Sir John Talbot (Claude Rains). While there, Larry becomes romantically interested in a local girl named Gwen Conliffe (Evelyn Ankers), who runs an antique shop. As a pretext, he buys something from her, a silver-headed walking stick decorated with a wolf. Gwen tells him that it represents a werewolf (which she defines as a man who changes into a wolf "at certain times of the year".)
Throughout the film, various villagers recite a poem that all the locals apparently know, whenever the subject of werewolves comes up:
Even a man who is pure in heart and says his prayers by night may become a wolf when the wolfbane blooms and the autumn moon is bright. That night, Larry attempts to rescue Gwen's friend Jenny from what he believes to be a sudden attack by a wolf. He kills the beast with his new walking stick, but is bitten in the process. He soon discovers that it was not just a wolf; it was a werewolf, and now Talbot has become one. A gypsy fortuneteller named Maleva (Maria Ouspenskaya) reveals to Larry that the animal which bit him was actually her son Bela (Bela Lugosi) in the form of a wolf. Bela had been a werewolf for years and now the curse of lycanthropy has been passed to Larry.
Sure enough, Talbot prowls the countryside in the form of a two-legged wolf. Struggling to overcome the curse, he is finally bludgeoned to death by his father with his own walking stick. As he dies, he returns to human form.
The poem, contrary to popular belief, was not an ancient legend, but was in fact an invention of screenwriter Siodmak. The poem is repeated in every subsequent film in which Talbot/The Wolf Man appears, with the exception of Abbott and Costello Meet Frankenstein, and is also quoted in the later film Van Helsing, although many later films change the last line of the poem to "And the moon is full and bright".
The original Wolf Man film does not make use of the idea that a werewolf is transformed under a full moon. Gwen's description and the poem imply that it happens when the wolfbane blooms in autumn. The first sequel, though, made explicit use of the full moon both visually and in the dialog, and also changed the poem to specify when the moon is full and bright. Presumably this is what popularized the full-moon connection in the 20th century. The sequel visually implies that the transformation occurs as a result of direct exposure to light from the full moon. Other fiction has assumed the transformation is an inescapable monthly occurrence and does not examine whether it is caused by light, tidal effects, or some cycle that happens to coincide with the moon's phases.