Rachel Penmark is a young girl who is upset at not winning a penmanship medal at school, having lost to her classmate Mark Daigler. During a school trip to the beach, Rachel tries to get Mark to give her the medal, he refuses and she chases him onto a fishing pier.
Teacher Alice Fern, notices Mark is missing during a roll call. They organize into search teams to look for him. When he is found, unsuccessful attempts are made to revive him on the shore near the pier, and the death is ruled as an accidental drowning.
Rachel's mother, Christine Penmark, is discussing all of the deaths Rachel has seen with neighbors Monica and Emory Breedlove, such as TV news reports about her own father's death. Christine recalls the death of a neighbor, Mrs. Post, who adored Rachel; Mrs. Post had accidentally fallen down the stairs. Christine worries when Rachel appears to be unaffected by Mark's death. Monica and Emory assure her that this is normal because children have a defense mechanism to process these things.
Christine asks Emory about a book he is writing about female serial killers. Emory mentions the name and case of serial killer, Bessie Danker; Christine's father, Richard Bravo, had worked on the story years earlier and the name seems to resonate with her. Rachel is outside playing when the maintenance man, Leroy Jessup, teases Rachael that she does not seem sorry about Mark's death, to which she replies, "Why should I feel sorry? He's the one that's dead."
Christine goes to meet with Ms. Fern, of the Fern Academy, to discuss something important. Ms. Fern says that Rachel may finish out the remainder of the current school term, but that she will not be welcomed back next semester due to concerns about her behavior. Ms. Fern says that others witnessed Rachel arguing with Mark and that he was last seen running from her. Rachel denies this, and Ms. Fern thinks Rachel is deliberately lying. Ms. Fern says the penmanship medal was missing. Rachel insists she did not take the medal, but admits she lied to Ms. Fern because she did not want to be blamed.
When they get home, Mark's parents, Rita and Fred Daigler, are waiting to talk with them. Rita knows Rachel was the last person to see Mark alive and she is looking for the medal. Rachel goes out to play and Christine invites the Daiglers inside for coffee. Rita is desperate to find the medal because of how much it meant to Mark that he won it. Christine apologizes, but is adamant that she and Rachel do not know where it is. As the Daiglers leave, Rita mentions the bruises on Mark's body.
Monica comes by to get a locket she'd given Rachel as a gift, to take to the jeweller to have the birthstone changed for her. Christine is horrified to find the penmanship medal while looking for the locket. She confronts Rachel about it, who admits that she lied. She says she asked Mark if she could see the medal and he said no. She offered him money to let her carry it around, and he agreed. She says she lied because she thought people would think she stole it.
Rachel is outside playing when Leroy brings up his theory about her killing Mark. She counters his attack by bringing up things she knows about him and they threaten each other with info that could be used as blackmail.
Christine considers whether a lack of morality can be hereditary. Later, Christine has a nightmare that she is a little girl being chased through a cornfield by a woman with a knife, Bessie Danker. She awakens and realizes she might be related to Bessie Danker because she is called "Christine Danker". The next day, Richard confirms that the details of Christine's recurring nightmare are actually true memories, and they adopted her after Bessie was arrested. They did not tell her about it because they thought she was too young to remember, and Christine worries that Rachel may have inherited psychopathy from Bessie.
Rachel is playing when Leroy provokes her into argument. He mentions that trace evidence of blood can be found even if someone tries to wash it away and that there is an electric chair for children. She thinks he is lying until he calls Emory over to verify that some things Leroy mentioned are true.
Christine catches Rachel trying to dispose of her cleated shoes. She realizes they were used in Mark's killing because of the crescent-shaped bruises he had. Leroy lies to Rachel, claiming he got her shoes out of the incinerator before they burned up. He becomes her next victim when she locks him into a shed and sets it on fire. Christine attempts a murder-suicide by giving Rachel an overdose of sleeping pills, and shooting herself with a revolver. Rachel survives and goes to live with Richard.
In the horror novel Wait Till Helen Comes by Mary Downing Hahn, published in 1986 (the year after The Bad Seed was first broadcast), the protagonist Molly remembers watching The Bad Seed on television and ponders whether her stepsister Heather is like Rachel Penmark.
