Philip Connell, a disgraced children's puppeteer, is forced to return to his childhood home in Norfolk, which is shared by his decrepit uncle, Maurice.

News reports begin to surface of a missing local boy, Michael, whom Philip initially encountered on the train ride to Norfolk.

Philip continues trying unsuccessfully to dispose of Possum—abandoning it in the woods, throwing it off a bridge, breaking it and sinking it off a dock, and even burning it—to no avail.

The search for Michael in the papers causes Maurice to remark to Philip that there was a similar case back then of a boy being assaulted by a masked man.

Holness had previously worked on the cult television series Garth Marenghi's Darkplace, which he wrote, directed, and starred in as the title character, as well as the publication of several short stories.

[6] The film is an adaption of Holness' own short story of the same name, which was published in the horror anthology The New Uncanny: Tales of Unease, and featured the publications of other writers.

[4][7] The story centered on a character unable to verbally and emotionally express himself due to childhood trauma, choosing instead to do so by creating a puppet.

[2][6] Opting to make "a modern silent film",[8][9] Holness was then reminded of the original short story, which he felt would fit perfectly with his idea to express as little dialogue as possible.

"[18] Holness stressed the importance of making the film 'through Philip's perspective of the world', ensuring that the character remained morally ambiguous.

Alun Armstrong was also cast as Phillip's uncle Maurice,[17] after originally turning it down due to scheduling conflicts for another project he was shooting in the United States.

[20] The studio had previously contributed to the productions of Star Wars: Episode II – Attack of the Clones (2002), Alien: Covenant (2017), Mad Max: Fury Road (2015), and Pirates of the Caribbean: Dead Men Tell No Tales (2017).

[21] The idea behind the creation of the puppet came from his own fear of spiders, while clarifying that in the original short story, the Possum was made by Phillip, who constructed it out of pieces of roadkill, and dead animals, with Holness comparing the design to that of the Frankenstein's Monster.

Part of the decision to cut back on the character's screen time came from Holness' feelings that the audience would become desensitized to the puppet's horrific appearance and thus not be as effective.

As creature design supervisor Adam Johansen later stated in an interview, "We tried to achieve a very home made feel for Possum but one that is twisted and disturbing.

"[22] With only a week before filming was scheduled to commence, Holness and Hailstone came up with the idea of having the character's face be inexpressive in which the audience could project their own fears onto it.

Hailstone then sculpted the Possum's face, which was made to resemble Harris' character, in three to four hours, with Holness approving the final design.

[17] The film's reasonably low budget and tight production schedule limited the amount of time that the studio could spend on designing and constructing the character.

The director also learned early in principal photography that he didn't need to shoot that many takes for scenes with Harris, as the actor "usually nailed it straight away.

[28][29][30] The studio itself was created by BBC in the late 1950s, composing many of the sound effects and music for the channel, including the now iconic theme for the television series Doctor Who, before closing in 1998.

[29] The soundtrack's album cover was designed by Julian House of Ghost Box Records, featuring Harris' character wandering in a barren landscape under an eerie green-tinted filter.

A special edition vinyl of the film soundtrack was eventually released on 12 June 2021, as a part of that year's Record Store Day.

Its consensus reads: "Unsettling and absorbing in equal measure, Possum presents a dark character study rich with rewards for fans of chilling genre fare.

Kim Newman of Empire praised Harris' performance, writing: "A disturbing, curiously beautiful British horror exercise.

"[59] Peter Bradshaw from The Guardian called it "deadly serious, but carries with it an echo or ghost of how this same material could have been played as ironic black comedy.

"[60] Neil Young of The Hollywood Reporter called it "a serious and dark journey into the labyrinths of cruelty and abuse", commending the film's acting and production design.

[25] Den of Geek's Daniel Kurland hailed the film as "the very best kind of psychological thriller that just continues to drill deeper into the same rich territory", praising Harris' performance, visuals, and its examination of trauma and abuse.

[61] Joseph Marczynski of Vice called it "deeply disturbing" and wrote, "Rich in symbolism but sparse in dialogue, Possum is a haunting and otherworldly exploration of Phillip's psyche as he struggles to shed the trauma of childhood abuse.

In his review, Harvey wrote: "Fans of conventional horror will no doubt sigh with boredom over the lack of action, but more adventurous viewers may lend this modest but distinctive enterprise its own eventual cult following.

"[49] Ben Robins and Olly Richards from Time Out London praised Harris' performance, and wrote: "Icky and unsettling, this British horror film crawls under your skin.

[73] Entertainment website Screen Rant included the film in their list of "10 Intense British & Irish Horror Movies That You've Probably Never Heard Of".