Sinner's Reward opens in medias res, with Jack Stanton on his knees and holding a gun to his temple. For the first time in his life as a hitman, he finds himself terrified of pulling the trigger.
The story flashes back to Jack driving down a country road with Jillian Conway at his side. They make a pitstop at Charon's Bar-B-Q. As Jill goes to the restroom, Jack's internal monologue explains that for all of his life, he believed he was destined to be nothing more than a hitman, until he first laid eyes on Jill. Luckily for Jack, Jill felt the same way and wanted a change in her life, so the two eventually ran off together, and have been on the run for just over a day.
Jack talks with the filling station's attendant and pays for gas. However, when Jack walks back outside, he is ambushed by the O'Conner Brothers and Jimmy Shea, who have been hired by Finn Conway to retrieve his wife and the man who ran off with her. The thugs grab Jill and pistol-whip Jack to the ground, but the attendant comes out and kills the O'Conners with his shotgun. Jimmy Shea tosses Jillian in his SUV and drives off. Jack loses consciousness.
Jack dreams of his childhood and his father Michael, who was also a hitman. Michael believed that Jack was "born to kill," and taught Jack how to fire a gun. He later ordered Jack to carry out his first hit: Jack's dog, Digger.
When Jack comes to, the old man points him in the direction that Jimmy and Jill went: towards Silent Hill. Jack gets in his car and drives after them. As night falls, Jack finds Jimmy being mauled by dog-like creatures in the middle of the road. When Jack steps out of his car, the two creatures are nowhere to be seen, and he frantically looks around for Jill.
Jimmy suddenly rises to his feet and explains that Jill is waiting for Jack in Silent Hill. Jimmy then begins taunting the hitman, showing no concern when Jack raises his gun. Jimmy rushes Jack, who shoots and kills him. Jack returns to his car and continues driving to Silent Hill.
Upon arriving in Silent Hill, Jack runs out of gas, and decides to abandon his car. He retrieves several weapons from his trunk and begins in search for Jillian Conway.
Meanwhile, in Boston, Finn Conway has yet to receive an update from Jimmy Shea or the O'Conner Brothers. He begins to regret sending them to retrieve his wife, as he now feels that he should clean up his own mess. Finn decides to go after Jill and take care of the situation himself.
In the streets of Silent Hill, Jack is distraught to find Jill's bloodstained dress. He then encounters a large monster and bludgeons it to death, but Jill appears, dressed in a nurse outfit and pleading for him to stop. She mourns over the monster's body, treating the situation as if Jack just murdered an innocent person. She then turns hostile and admonishes Jack for what he's done, not just here but throughout his whole life. She goes on to explain that the two of them have created this hellish reality, and that all of their past victims are waiting. Jack states that Jill never did anything and thus can't have "victims," but Jill runs off.
Another monster confronts Jack, who recognizes its face: it is Tim Delaney, Jack's first hit under Finn Conway. Shaking off his bewilderment, Jack kills the monster and goes after Jill. He soon hears someone else screaming for help, and comes upon a young woman, Sara Linwood, tied to a cross and surrounded by more monsters.
Jack saves Sara by shooting the monsters, which bear the humanoid faces of other people he has killed in the past. He gets Sara down from the cross, and she explains that she was with her parents before things turned dark and she became lost. Jack comforts the frightened girl and offers her a gun, but she refuses it, as she hates guns. The two head off to look for Jillian and, hopefully, Sara's parents.
Finn Conway arrives at Charon's Bar-B-Q and talks to the attendant, who lies that he hasn't seen Jimmy Shea or the O'Conners. The old man does reveal that Jack and Jill stopped by, but claims not to remember where they went. When Finn pulls out his gun, the old man calmly lies that they were looking for a place to eat and that he pointed them to Silent Hill. Finn then leaves and heads to the town, where he finds Jack's car and begins searching on foot.
Jack and Sara encounter the dog-like creatures from earlier and seek refuge. Jack comes across Brookhaven Hospital and, linking it to Jill's nurse costume, heads inside with Sara. Jack soon hears someone screaming from the upper floors, though Sara doesn't hear anything. He runs upstairs and finds Jill in a room full of dead monsters on gurneys. Jill tearfully explains that she tried to make things right by saving the "monsters," which both she and Sara see as people.
Sara uncovers one gurney and finds her father and mother, dead with bullet holes in their foreheads. Jack becomes shocked to see the corpses. As her own forehead begins to bleed, Sara angrily tells him, "It was you!" A siren blares, and Jack passes out. A flashback reveals that shortly before running off with Jill, Jack carried out one last hit for Finn: Boston councilman Linwood and his wife. He shot them both in their house as they slept, but then ran into their daughter, Sara. Rather than leave a witness, Jack shot Sara in the head and left.
Jack awakens in the Otherworld and tries to leave with Jill, but she is resigned to the fate that Silent Hill has in store for her. With a group of monstrous Nurses behind her, the undead Sara coldly tells Jack that it's "time to pay up."
Jack tries in vain to apologize to Sara, weakly explaining that killing her and her family was nothing personal. Sara taunts Jack with his own family upbringing—how his father forced him to become a killer—and accuses both him and Jillian of living diseased lives, which have killed so many people along the way.
Jack defends Jill, claiming that she never killed anyone. But Sara retorts that Jill is guilty of greed—of living hedonistically on blood money rooted in crime and the suffering of others. Sara tells Jack that it's not too late for redemption, but he and Jill must do it themselves.
Jill says goodbye to Jack and willingly walks to the Nurses, allowing them to "cure" her by stabbing her to death. Horrified and in denial, Jack runs out of the hospital.
Back outside in the Fog World, Jack runs into Finn, who demands to know where Jill is. Sara comes out of the hospital and reveals that Jill is dead. Enraged, Finn prepares to shoot Jack, but the town will not let him interfere with Jack's potential path to redemption. Pyramid Head appears and impales Finn with its Great Knife.
Jack runs, desperately hoping to escape Silent Hill. As he gets to Rosewater Park, he sees a manifestation of his dead dog, Digger, with a bullet wound on its face. Jack falls to his knees as Sara reappears and reminds him of what he must do. After making a genuine (but still futile) apology to Sara, Jack gives in and puts his gun to his temple. He pulls the trigger and "cures" himself. His dead body lies alone in the park, and the scene transitions to a sunny, serene view of the town.