The film is based upon a medieval Jewish legend about a clay figure that is brought to life to serve as a protector of the Jews who live in the Prague ghetto in the year 1580.

Rabbi Loew (Albert Steinruck) sees danger for the Jews in the constellation of the stars and so begins building the Golem. The Golem looks like a cross between a Neanderthal and a totem. The prophecy is soon fulfilled as Emperor Rudolf II (Otto Gebuhr) issues an edict stating that the Jews must leave Prague before the end of the month. He believes that the Jews have started a plague in the city.

Meanwhile, the Rabbi's own daughter Miriam (Lyda Salmonova) has fallen in love with Florian (Lothar Muthel), one of the emperor's courtiers. Eventually, the rabbi's assistant (Ernst Deutsch) finds out about their affair and betrays them.

Through prayer, a circle of fire rises to engulf Rabbi Loew and in this trance-like state he is told that if he places the magic word "Aemaet", the Hebrew word for "truth" or "God," in an amulet and then puts it upon the Golem's chest, the creature will come to life. If the amulet is removed, the creature becomes inanimate again.The rabbi's assistant (Ernst Deutsch), the Golem (Paul Wagener), and Rabbi Loew (Albert Steinruck)

The Rabbi then brings the Golem (played by director Paul Wegener) to the Emperor. The Emperor commands the Rabbi to perform a feat of magic. As Loew shows them his vision of the Exodus of the Jews, the courtiers laugh and the building suddenly begins to crumble. Just as it seems as if the building is about to collapse, the Golem saves them by holding up the ceiling with his hands. The Emperor agrees to rescind his edict against the Jews.

Although the Golem has saved the people of the ghetto, the Rabbi knows from the texts he has read that the Golem may eventually destroy them. He resolves to smash the statue, but is called away to celebrate the Jews' great fortune. He leaves the statue on the floor, with the amulet sitting beside it.

THE GOLEM is a film of great power, as hypnotic as a German Expressionist vision of life as a waking dream. The dim light and looming shadow were photographed by Karl Freund, who also shot two German Expressionist masterpieces: Fritz Lang's Metropolis and F.W. Murnau's The Last Laugh. Freund later emigrated to America and eventually became the head cameraman for I Love Lucy.

Hans Poelzig's stylized sets convey the claustrophobia of ghetto life, with curved stone walls and sharply pointed roofs. The two sets of circular stairs the characters climb down to enter the rabbi's study look like the twin chambers of a human heart.

A messenger plays the Schofa Horn to bring people together for prayer. However, THE GOLEM is not really a German Expressionist story; it is more a combination of Jewish mysticism and fairy tale. Director Wegener portrays the supernatural elements of the story without irony or psychological explanation, as if we were truly in medieval Prague, when people would have believed that an amulet and an incantation could bring a clay figure to life.

Wegener's acting performance in THE GOLEM is subtle as he plays a force of nature without conscience or emotion. The Golem is only capable of brute force; therefore violence is inevitable. He quickly learns that he can remain alive if he refuses to let anyone take off the amulet and so he pushes away anyone who tries to remove it. In one of the film's most powerful scenes, the Golem dismissively tosses Florian from the roof of a building and drags Miriam by her braided hair through the narrow stone streets of Prague.