The plot follows a young college student who wins a vacation to a rural resort run by an elderly couple who serve meals of human flesh.

As she is opening her mail, she notices that she has received a mysterious letter, telling her that she has won a free vacation at a seaside bed and breakfast, called the Red Wolf Inn.

There are two other guests as well, both lovely young females named Pamela (Janet Wood) and Edwina (Margaret Avery).

A police car pulls up outside the mansion, and Regina bursts out of the house seeking help, but the cop is another grandson of the Smiths (played by producer Michael MacReady).

Now realizing she is a prisoner, Regina is left in the charge of Baby John while the Smiths go into town, and she seizes the opportunity to explore the forbidden refrigerator, where she finds the severed heads of Edwina and Pamela.

Now realizing she will be next, a panicked Regina bolts from the house with Baby John pursuing, but she is caught by Evelyn and Henry returning from their errand.

Regina knows that Henry and Evelyn intend to kill her, but Baby John has a childlike attitude, and thinks they will learn to accept her.

The Smiths study her carefully to see if she will eat the meat now that she knows what it is, hence judging if she would actually be able to join their clan as a mate for Baby John.

Realizing the dog is dead, Evelyn uses it to distract Baby John by weeping over the corpse, while Henry advances on Regina with a large cleaver.

The Los Angeles Herald Examiner attributs three Californian locations for the filming, that took place in 1972: Montecito, Piru and Redlands.

TV Guide awarded the film one out of four stars, but added that it is a "gruesome parody...Creepy and witty in all the right spots, [Terror at Red Wolf Inn] is no masterwork, but it does have some merit as part of the subgenre of family horror.

"[2] Leonard Maltin awarded the film one-and-a-half stars out of four, writing that it "Predates other cannibalism efforts, and doesn't take itself that seriously.