TARDIS appears right in the middle of a storm on the planet Karn, and the Doctor suspects the involvement of the Time Lords. Sarah finds a graveyard of broken ships and a castle nearby, and they both head there. They are let into the castle by a servant, Kondo, who has a hook for a hand, and his master, Solon. During the meal, they drug the Doctor, and Sarah pretends to be asleep. It turns out that Solon is a famous surgeon who wants to resurrect Morbius, a criminal Time Lord, and is assembling a new body for him from parts of others.
Meanwhile, at the Sisterhood of Karn, it is discovered that the Flame of Life is dying out, and without the flame, the Elixir of Life, known only to the Sisterhood and the High Council of Gallifrey, cannot be produced. The senior sister Maren suspects that the Doctor was sent here to steal the remaining elixir, and using a ritual, the sisters transport the TARDIS to themselves, and then the Doctor. The Doctor regains consciousness and is immediately accused of conspiring to steal the elixir. The Doctor denies this and says he sensed the mind of Morbius. Maren rejects this, saying that he is dead, and sentences the Doctor to be burned.
Discovering the Doctor's absence, Solon and Kondo go to the Sisterhood, followed by Sarah. They try to rescue at least his head, but the sisters refuse and expel them. Meanwhile, Sarah frees the Doctor, and they both escape, but Maren blinds Sarah, and they have to return to Solon. Solon examines Sarah, and the Doctor finds a headless body in the laboratory. Solon tells the Doctor that to restore Sarah's sight, the elixir of life is needed, and the Doctor returns to the Sisterhood. Meanwhile, Sarah finds Morbius's still-living brain in the basement and realizes that Solon has sent the Doctor into a trap. She locks him in the laboratory and escapes from the castle, but Kondo catches and brings her back.
Meanwhile, Maren tells the Doctor that Sarah's sight will restore itself, and he convinces the sisters of the presence of Morbius's mind. He examines the flame and dissects its chemical processes.
Morbius learns that the Doctor is a Time Lord and demands a new body with an artificial brain tank. But Kondo recognizes his hand on Morbius's body and drops the brain on the floor. Injuring Kondo, Solon forces Sarah to help him with the operation.
The Doctor sneaks into the castle and meets Sarah, who has regained her sight. She tells him that Morbius is alive again and has gone out of control due to flaws in the artificial skull. He kills Kondo, and the Doctor and Sarah hide in the laboratory. Solon knocks out the escaped and sister-killing Morbius and takes his body for surgery. The Doctor releases gas into the ventilation, and Solon dies, but he finishes the operation. Morbius begins a mind duel with the Doctor. During the duel, the Doctor falls unconscious, but the Sisters of Karn appear and throw Morbius off a cliff. Maren gives her elixir to the Doctor, and he gets up, while Maren enters the Flame of Life, becomes young, and disappears. The Doctor uses a match to restore the Flame of Life to its former size, gives the sisters the entire box of matches, enters the TARDIS with Sarah, and this time it disappears in a flash of light and smoke.