In 1944, as a last-ditch attempt to win the war, the Nazis hired the undead Russian mystic Grigori Rasputin to open up an inter-dimensional portal in order to awaken the Ogdru Jahad, merciless entities that had been imprisoned. Rasputin actually planned to use them to meet his own ends - to destroy the world. Also present at the ritual are the immortal Ilsa Haupstein and Nazi Lieutenant Colonel Karl Ruprecht Kroenen. Shortly thereafter, a small team from the United States Army interrupts, aided by Professor Trevor Broom. In the ensuing fight, Rasputin is seemingly killed and the portal is destroyed, with Llsa and Kroenen narrowly escaping. After searching the grounds, the team find a small, red demon-boy with a right hand made of stone. Professor Broom lures the demon-boy towards him with a candy bar, and takes him in, eventually naming him Hellboy.
Sixty years pass, and the young FBI agent, John Myers, arrives at the Bureau for Paranormal Research and Defense , which is operated by Broom. He is introduced to agents Abe Sapien (an amphibious man with psychic abilities) and Liz Sherman (a pyrokinetic). Liz is yet to gain control over her powers, and as a result has often been admitted to psychiatric care.
Meanwhile, Ilsa and Kroenen resurrect Rasputin. They travel to New York's Machen Library of Paranormal Artifacts to manipulate a statue and release a vicious hell-hound known as Sammael. With his magical powers, Rasutin gives Sammael the ability to regenerate - when one hound dies, two are born and grown within minutes. He then visits Liz at the mental hospital and reactivates her powers. This causes her to burn down the hospital in her sleep. After a chat with Myers, she later returns to the Bureau.
After encountering Sammael, Hellboy kills it repeatedly, which in turn creates dozens more. The team is sent to track the hounds in the sewers of New York, but the endeavor ends badly with Abe and two agents injured, and another two dead. As Kroenen's undead body is run by clockwork, he uses his ability to shut himself down to appear dead. His body is brought to the Bureau to be examined. After witnessing an argument between Hellboy and FBI Director Tom Manning, Liz is frustrated and goes out for coffee with Myers. This leaves Hellboy jealous and he secretly follows them.
Back at the Bureau, Rasputin revives Kroenen and they go after Broom. Before killing him, Rasputin shows Broom a future featuring Hellboy as destroyer of the world, his destiny.
Under the guidance of Manning, the BPRD team go to Rasputin's mausoleum, where they soon are separated. Hellboy and Manning arrive at Kroenen's lair, where they team up to defeat him. Leaving Manning behind, Hellboy reunites with Liz and Myers in Sammael's nest. With Hellboy overhelmed by the vast numbers of hounds that are attacking him, Liz has no choice but to overcome her fears and use her powers to destroy the beasts and their eggs. But the blast is so powerful that Myers, Liz and Hellboy are knocked unconsious and captured by Rasputin.
In the catacombs, Rasputin plans to use Hellboy to release the Ogdru Jahad. To force Hellboy to comply, he sucks out Liz's soul, promising to reverse the action if Hellboy does as he asks. As he does not want to harm Liz, Hellboy agrees, and unleashes the inner power of Anung Un Rama. Witnessing this, Myers attempts to remind Hellboy of whom he is before he releases the Ogdru Jahad, and that he has a choice. Remembering whom Professor Broom had brought him up to be, Hellboy snaps off his horns and prevents the Ogdru Jahad from being released. Furious, Rasputin screams with rage but Hellboy stabs him with one of his horns.
However, Rasputin turns into the enormous Behemoth, a creature of the Ogdru Jahad. Hellboy attempts to defeat the monster with a sword from a stone statue, but realizes the only way to win is to allow himself to be swallowed whilst detonating a belt of live hand grenades. After killing the monster, Hellboy returns to Liz, who appears to be dead, but he whispers in her ear and she awakens. Hellboy subsequently tells her that he restored her soul by telling the creatures on the other side that they'll 'be sorry' if they don't let it go. The couple embrace surrounded by flames as Myers, in a voice over, states that what truly makes a man a man is 'not how he starts things, but how he decides to end them'.
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