Claire Bartel (Annabella Sciorra) is mother to Emma (Madeline Zima) and pregnant with her second child. At a routine checkup, Claire is molested by an obstetrician, Dr. Victor Mott (John de Lancie), who is replacing her retired doctor. Claire tells her husband, Michael (Matt McCoy), about being sexually violated and the couple decide to report the incident to the authorities. Four more women come forward to corroborate the Bartels' story and Dr. Mott commits suicide to avoid being arrested by the authorities.
Dr. Mott's pregnant widow (Rebecca De Mornay) meets with her lawyers and is told that her husband's assets have been frozen, that she will eventually have to leave their luxurious home after having the baby, and that the lawsuits may still continue. Upon hearing this, Mrs. Mott goes into premature labor, but hemorrhages badly and loses her baby, causing her to require an emergency hysterectomy. Later on, while still recovering in the hospital, Mrs. Mott sees a news story on television showing Claire as the woman who alerted authorities about her husband. Mrs. Mott blames Claire for her personal losses and financial ruin.
Months pass and Claire gives birth to a boy, Joey. The Bartels have hired a worker named Solomon (Ernie Hudson), a man with a developmental disability, to perform some handywork around the house, such as building a new fence. Solomon takes a liking to the family and wishes to hold baby Joey, but Claire asks him not to. Michael is insistent that the Bartels look for a nanny to help with the children. Claire, in the process of building a greenhouse in the couple's backyard so that she can start a side plant business, goes along only reluctantly, believing she is perfectly capable of doing both as well as being wary of hiring a complete stranger to take care of Joey. Mrs. Mott, now under the pseudonym Peyton Flanders, applies for the position and is hired after deliberately placing the back of one of Claire's earrings (which was constantly falling off) into baby Joey's mouth and feigning the baby's rescue from potentially choking.
Mrs. Mott begins to subtly terrorize the family in a delusional attempt to replace Claire. She begins breastfeeding Joey in secret (which causes him to no longer take his own mother's milk), encourages Emma to keep secrets from her mother, tempts Michael with her sexuality and plants the thought in Claire's head that Michael may be having an affair with close friend and former girlfriend, Marlene Craven (Julianne Moore). Mrs. Mott furthers this notion by suggesting that he and Marlene plan a surprise birthday party for Claire, thus leading to Marlene and Michael having to meet in secret. Marlene earlier warns Claire to not let "Peyton" get too close to the family, quoting the line, "The hand that rocks the cradle is the hand that rules the world" from the poem "The Hand That Rocks the Cradle" by William Ross Wallace.
Mrs. Mott continues with her attempt to destroy the family and tries to turn
