The storyline revolves around a giant plesiosaur, akin to the Loch Ness Monster, which appears in Crater Lake in Northern California, near Susanville (not to be confused with the much more famous Crater Lake in Oregon). As people are attacked by the monster, the Sheriff (Cardella) investigates along with a group of scientists in order to stop the creature.
In Crater Lake, Northern California, Dr. Richard Calkins (Hyman) is informed by his colleague Dan Turner (Garrison) that he and his girlfriend Susan Patterson (Cobb) have made an incredible discovery in a nearby cave system. The three head down and discover a system of cave drawings, including what appears to be a depiction of people fighting off a Plesiosaurus, thus providing evidence that dinosaurs existed at the same time as man. However, a flaming meteorite crashes into the lake just overhead, resulting in a cave-in that destroys the cave system and the drawings, while the three scientists are barely able to escape alive. The local sheriff, Steve Hanson (Cardella), sees the meteorite crash and radios in the incident before continuing on his patrol.
Several months later, Sheriff Hanson meets with the three scientists to go search for the meteorite. Turner and Patterson dive down to the bottom of the lake, only to find that the meteorite is still too hot to recover and has resulted in the entire lake becoming significantly warmer than before, rising to approximately 90 degrees. Somewhere else on the lake, a birdwatcher (Hal Scharn) is setting up his equipment when the monster suddenly rises out of the water, moves onto the shore, and kills him.
Some time later, a performer named Ross Conway (Hoover) and his wife Paula (Lewis), are on their way to a show when their car suddenly begins to break down. They stop at a gas station and learn from the mechanic (John Crowder) that their car won't be repaired for several more days. The attendant tells them that the fastest method of transportation at this point is by boat across the lake. The couple heads down to Arnie and Mitch's dock to rent a motorboat for $25 and head out. While out on the lake, they are attacked by the monster, but manage to outrun it due to the boat's motor and run it aground. When the monster pursues them onto the shore, Ross empties the can of gasoline into the boat and sets it on fire, with the blaze scaring the monster away.
While at the local diner, the Sheriff spots a man (Sonny Shepard) who is wanted for armed robbery in the nearest town that killed the clerk (Mike Simmons) and another customer (Mary Winford), and quickly pursues him into the forest. After the robber drives his car off a cliff and jumps out, the Sheriff pursues him on foot. The chase eventually leads them down to the shore, where the Sheriff shoots him in the knee, then stops and hides behind a tree to reload. During the brief pause, the monster quickly snatches the robber and drags him under. The Sheriff does not hear it happen, but discovers a large blood stain on a nearby rock. Meanwhile, Calkins' autopsy report on Fuller's head comes in, and he tells the Sheriff that the wounds were caused by an animal's teeth, and the attacking animal is not only of a significant size, but also living in the lake.
The Sheriff, Calkins, Turner, and Patterson host a town meeting in the diner the next day, informing the town of the danger and what they plan to do to stop the monster. Arnie and Mitch ultimately take the scientists' side in favor of keeping the monster alive, saying it'll bring in a significant amount of money for the town. However, a man named Ferguson (Joe Sasway) is attacked by the monster and barely manages to make it to safety inside the diner. The Sheriff, Turner, Patterson, Arnie, and Mitch all head outside to confront the monster, which is just outside the barricade of farming vehicles and a wall of hay bails. The Sheriff starts up a bulldozer, but Arnie attempts to stop him at gunpoint, saying that the monster must live. The Sheriff convinces him that nothing will stop the monster without killing it, and Arnie jumps in the back, shotgun at the ready. As the monster draws closer, Arnie panics and attempts to flee, only to be caught and killed by the monster. The Sheriff slams into the monster with the bulldozer, causing it to drop Arnie's lifeless body. When it reaches its head down to try to pick up Arnie's body again, the Sheriff drives the bulldozer forward and repeatedly slams the bulldozer into the monster's neck, finally killing it.
In the aftermath of the battle, the Sheriff, Calkins, Turner, Patterson, and Mitch all mourn Arnie's death, with Mitch vowing to continue the boat rental service that he and Arnie started, softly repeating "our boats...our boats."
- Sheriff Steve Hanson - Richard Cardella
- Arnie Chabot - Glenn Roberts
- Mitch Kowalski - Mark Siegel
- Richard Calkins - Bob Hyman
- Dan Turner - Richard Garrison
- Susan Patterson - Kacey Cobb
- Ross Conway - Michael Hoover
- Paula Conway - Suzanne Lewis
- Senator Jack Fuller - Marv Eliot
- Blackmailer - Garry Johnston
- Waitress - Susy Claycomb
- Villager - Jim Goeppinger
The film is mostly notable for being an example of David W. Allen's early stop-motion animation under the process name "Fanta-Mation". Otherwise, the film was widely panned by critics, with DVD Drive-In calling it "one of the worst giant monster flicks of all time". The film suffered from financing and publication problems with Crown International; as Cardella recounts:
“Crown International was part of the financing and they just screwed up everything. They pulled their support for some key scenes (that would have explained a lot and plugged some of the obvious holes), added a canned score that really sucked, and turned it over to some hack to edit. The asshole didn't even use a fade or dissolve in the whole freakin' picture!”
Despite being a critical flop, the film was a commercial success and made $3 million in spite of the under $100,000 budget. The film gained a VHS release on United Home Video, and DVD release on Rhino Home Video. In 2011, The Crater Lake Monster was used as fodder for the Rifftrax comedy team. Mill Creek Entertainment released The Crater Lake Monster on Blu-ray disc as part of a double-feature disc in March 2011, pairing it with Galaxina, and as part of a 3 double sided DVD set called 12 Creature Features in 2012.