"The Signalman" opens with an unnamed narrator calling "Halloa! Below there!" to a signalman standing at the bottom of a steep rail cutting. The signalman, rather than look up, stares into the train tunnel. The narrator notices something strange about the way the man looks into the abyss. The signalman eventually looks up and shows the narrator a zigzag path he takes to the bottom.
Inside the signalman's box, the two men have a conversation. The narrator notices that the signalman attends to his telegraph and flagging duties with exactness, though the man looks ill at ease. At two points he looks at the telegraph bell and then at the red danger light above the tunnel, even though there is no coming train or telegraph message, nor sound from the bell. The narrator agrees to come the next day to hear what is troubling the man. Before he leaves, the signalman asks if the narrator said "Below there!" because the words were conveyed to him from some supernatural source.
The narrator returns the next day. The signalman explains how an apparition has been visiting him, a figure standing near the red danger light. The figure first appeared a year earlier, and the appearance presaged a horrific train collision in the tunnel. The signalman had rushed to the stranger, but the moment he approached the figure vanished. The signalman telegraphed both ends of the line to find out what the danger was, but he received all-clear messages in reply. A few hours later, the accident happened. Six or seven months later, the specter had appeared again, covering its face in its hands, as if mourning. The next train that passed had to stop, as a young woman died suddenly as the train entered the tunnel. The signalman explains to the narrator that he is so uneasy because the apparition is back, and he is waiting for something dreadful to happen, but he doesn't know where the danger will strike. The apparition has lately been covering his face and waving his arm, shouting "Below there!" and "Look out!"
The narrator, though frightened by what he hears, tries to reassure the man that these must have been coincidences. The visions were likely hallucinations, and the shouts were sonic distortions produced by the wind whistling through the valley and playing the telegraph wires like harp strings. He leaves the signalman unsure if he should alert the man's superiors. He feels it would be unfair, so instead he vows to himself that he'll return the next day and convince the signalman to consult a doctor for his medical opinion on what's causing him to see and hear the apparition.
The next day, the narrator arrives to learn the signalman was run down by a train. The men on the scene are surprised, as no man knew his work and duties as well as the signalman. The train driver explains how it happened, and says the signalman didn't seem to hear the train whistle or his shouts of "Below there!" The driver demonstrates how he covered his eyes and waved his arm as he ran the man down. The story ends with the narrator commenting on the eerie coincidence of the driver's shouts and gesticulations matching the apparition's. He also notes that the driver said "For God's sake, clear the way!"—a phrase he had earlier added in his own mind to the gestures the signalman demonstrated.
