Marshal Edward "Teddy" Daniels and his new partner, Chuck Aule, go on a ferry boat to Shutter Island, the home of Ashecliffe Hospital for the criminally insane, to investigate the disappearance of a patient, Rachel Solando (who was incarcerated for drowning her three children).

Teddy also wants to avenge the death of his wife Dolores, who was murdered two years prior by a man called Andrew Laeddis, whom he believes is an inmate in Ashecliffe Hospital.

Andrew/Teddy refuses to believe this and takes extreme measures to disprove it, grabbing what he thinks is his gun and tries to shoot Dr. Cawley; but the weapon is a toy water pistol.

Teddy / Andrew still refuses to accept the truth, despite the evidence presented, and is brought to a cell in ward C. After being sedated, he dreams about the months leading up to the death of his family.

Because of his stubbornness and his alcoholism, he failed to realize the extent of Dolores’ mental instability despite the warnings of those around him, including his children.

One day, he forgot to properly store away the laudanum meant to treat her before leaving for two weeks, returning to find Dolores having drowned their children while under the influence of the medication.

Andrew, despite appearing to be at peace, talks to Sheehan as if he is Chuck and insists they need to get off the island, leaving it ambiguous whether he has truly regressed, or if he is deliberately looking to receive a lobotomy, unable to live with the guilt surrounding the loss of his family.

The novel has been adapted into a film by screenwriter Laeta Kalogridis and director Martin Scorsese, starring Leonardo DiCaprio as Teddy Daniels, Mark Ruffalo as Chuck Aule, Ben Kingsley as Dr. Cawley, and Max von Sydow as Dr. Naehring.

The film was originally scheduled to be released by Paramount Pictures on October 2, 2009, in the United States and Canada.

The story has also been reworked into a graphic novel published by William Morrow, with art by Christian De Metter (ISBN 0-06-196857-9).