Meg Altman, who has recently gone through a divorce, and her daughter Sarah have purchased a new house in New York. While exploring the mansion, they discover a panic room. This room is designed to be extremely secure, making it virtually impenetrable. When three burglars invade their home, Meg heads for the panic room. However, her problems escalate from there. The intruders are aware of her location, and what they want most is stored in that very room. Meg Altman feels emotionally distant from her unfaithful ex-husband, Stephen Altman, a wealthy pharmaceutical executive. She and their street-smart pre-teen daughter, Sarah, are spending their first night in their newly acquired brownstone on Manhattan's Upper West Side. The previous owner, a wealthy recluse who has passed away, made several renovations, including an operational elevator and a secure panic room. This wealthy man's family is now in dispute over his extensive estate, part of which, rumored to be $3 million, is concealed in a safe within the panic room floor something that three criminals know.
Junior, the grandson of the former owner, is working with Burnham, who operates the security system for the brownstone, and Raoul, Junior's armed associate. Their plan is to retrieve the hidden money. Believing the house to be empty, they break in, only to discover that Meg and Sarah are inside. The two women manage to reach the panic room, which currently lacks a functioning telephone, something Burnham is aware of. He also knows that he and his accomplices cannot access the panic room.
A standoff ensues: Meg and Sarah refuse to leave the panic room, while the three criminals won't depart without the money. As Meg and Sarah plot to send a message to the outside world—either to the police or Stephen they are pressed for time due to Sarah’s diabetes, as she does not have her insulin. Meanwhile, the criminals face their own challenges; each has different personalities and motivations regarding the theft, leading to varied opinions on how far they are willing to go to obtain the money. Recently divorced Meg Altman (Foster) and her young diabetic daughter, Sarah (Stewart), seek refuge in the panic room of their new New York home. This happens when three intruders (Leto, Whitaker, and Yoakam) break in, aiming to retrieve millions hidden in a safe located inside the very panic room they are using for protection.
The burglars invade the house expecting to find cash but discover that the owners are asleep upstairs. The situation is dire for the mother, who struggles with claustrophobia, and her daughter, who has low blood sugar, as they get trapped in the Panic Room supposedly a secure place from the criminals. However, they are confined with the money the thieves desire, and the intruders threaten to either break in or force the mother and daughter out.