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Seth Baxter(Joris Jarsky), a convicted murderer who was released early from prison on a technicality, is chained to a table beneath a pendulum blade. A videotaped message informs him that in order to survive, he must crush his hands by putting them into two presses and pushing the buttons inside. Even though he does so, the pendulum swings down and slices him in half. The fact that the trap was inescapable marks it as a creation of someone other than Jigsaw (Tobin Bell).

In a scene from the end of Saw IV,Agent Peter Strahm (Scoot Patterson) enters the room where Jigsaw died and shoots Jeff Reinhart (Angus Macfadyen) dead in self-defense. He is then locked in by Det.Lt.Mark.Hoffman (Costas Mandylor), but soon finds a hidden door that leads into a passage. Here a microcassette recording urges him not to proceed any further; ignoring it, he moves down the passage and is attacked by a figure in a pig mask.

When Strahm wakes up, he discovers that his head has been sealed in a box, which quickly begins to fill with water. A self-administered tracheotomy keeps him breathing until the police arrive at the Gideon meatpacking plant. Hoffman emerges, carrying Jeff’s daughter Corbett (Niamh Wilson) and claiming that he saved her, but is greatly surprised when Strahm is brought out alive as well. The chief of police announces an end to the Jigsaw murders and congratulates Hoffman for closing the cases.

Jill Tuck (Betsy Russell), John Kramer’s ex-wife, receives a videotape and a box from his lawyer. On the tape, John tells her that the items in the box are of great importance and that she will know what to do with them. After looking inside, she takes the box and hurries away without revealing its contents.

Strahm learns that Agent Lindsey Perez (Athena Karkanis) died of the wounds she suffered in Saw IV, and that the last thing she said was Hoffman’s name. He confronts Hoffman with this fact, further unsettling him. Gathering up all the files on Jigsaw’s victims, Strahm revisits some of the crime scenes and pieces together Hoffman’s involvement. Seth had murdered his sister, so he set up the inescapable pendulum trap in revenge. Flashbacks reveal that Jigsaw used his knowledge of these events to blackmail Hoffman into becoming his accomplice. The two worked together to capture Paul Stallberg (Mike Butters) for the razor wire trap in Saw, set up the nerve gas house in Saw II, and discussed plans before Amanda Young (Shawnee Smith) brought Lynn Denlon (Bahar Soomekh) to Jigsaw’s bedside in Saw III.

In a sewer, five people – Ashley, Charles, Brit, Mallick, Luba – wake up in a trap in which collars are locked around their necks, connected to each other and to a set of guillotine blades behind them. The keys to the collars are in glass boxes at the other end of the room. Mallick (Greg Bryk) rushes ahead to get his, starting a one-minute countdown and dragging everyone else toward the blades. All but Ashley (Laura Gordon) free themselves before time runs out; she drops her key and is decapitated when the collars are yanked back to the wall.

In the next room, the four survivors must break jars hanging from the ceiling and find three keys to shelters that can protect them when the bombs in the room explode. Charles (Carlo Rota) attacks Mallick and takes a key from him, only to be knocked down by Luba ( Meagan Good), who gives the key back to Mallick. Charles is the only one killed in the explosion. The third room requires five cables to be connected to a bathtub full of water in order to unlock the door, but they are all too short to reach it. Brit (Julie Benz) stabs Luba in the neck, and she and Mallick throw the body in the tub and hook the cables to it so the door will open.

In the fourth and final room, the exit door can only be opened by filling a beaker with ten pints of blood, to be obtained by the captives putting their arms into a box fitted with circular saws. Here, noticing five holes in the box for their arms instead of two, Brit realizes that the five of them were meant to work together so that they could all survive to this point. With no other options, she and Mallick begin sawing their arms to fill the beaker themselves.

While these games are playing out, Hoffman steals Strahm’s cell phone and uses it to make Strahm’s boss,Dan Ericson (Mark Rolston), think that Strahm is Jigsaw’s accomplice. He plants the phone and Erickson’s own personnel file outside the exit from the fourth room, and Erickson arrives here just as Brit and Mallick get the door open. Both pass out from blood loss as Erickson calls for backup; he then puts out an all-points bulletin for Strahm's arrest.

Strahm’s investigation brings him to a small room that contains a transparent box full of broken glass. A recorder inside the box delivers a message from Hoffman: Strahm will have to trust him and get in if he wants to survive. Instead, Strahm stops the tape short, hides in a corner and ambushes Hoffman when he enters the room, eventually throwing him into the box and closing it. Strahm then plays the remainder of the tape, learning that if he did not comply, he would die and "simply vanish." The door to the room closes and locks as the box lowers Hoffman safely beneath the floor, while the walls come together and crush Strahm to death.