One of the most intricate elements of "The Dunwich Horror" is its character development. At first glance, the story appears to lack a clear protagonist. The narrative moves from Lavinia Whateley to her father, "Old" Whateley, then to her son, Wilbur Whateley, and finally to Dr. Armitage. Despite these shifts, the plot remains cohesive and the suspense is sustained. This is because the true central character is the mostly unseen and intangible "horror" itself. Shortly after Wilbur's birth, Old Whateley proclaims, "some day yew falks'll hear a child o' Lavinny's a-callin' its father's name on the top o' Sentinel Hill!" This seems to refer to Wilbur, though the strange occurrences at the Whateley farm hint that Old Whateley might have meant something else.

The Whateleys purchase cattle in unusually large numbers. Many of these animals vanish, while others are found anemic and bearing peculiar wounds. Later, the upper floor of the farmhouse is renovated; its interior walls are removed, and windows are boarded up. Eventually, the first floor undergoes similar changes. The characters' actions consistently revolve around the "horror" within the house. Lavinia gives birth, prompting part of the house to be sealed off; after her death, Old Whateley takes charge, urgently making space for the "horror." When he dies, his grandson Wilbur continues the work, even moving into a shed to allow the entire house to accommodate the growing "horror." Wilbur's library studies align with Old Whateley's directive to control the "horror" and "open up the gates to Yog-Sothoth."

When Dr. Armitage steps into the spotlight, his focus quickly shifts from thwarting Wilbur's dark plans to preventing the "horror" from annihilating all life on Earth. The suspense does not arise from the mystery of the "horror's" identity—it's clear that it is Wilbur's twin and that both are offspring of Lavinia and Yog-Sothoth. Instead, the anticipation of the monster's inevitable rampage maintains interest. The perpetual activity surrounding the "horror" underscores its central importance, only slightly diminished by Dr. Armitage's verbose explanations at the story's conclusion.

Dr. Armitage, along with his colleagues Rice and Morgan, are typical Lovecraftian scholars. They appear to inform readers about the ancient origins of the current threat to humanity and, armed with incantations from the Necronomicon, bravely face the formidable foe. The inhabitants of Dunwich, though intriguing for their dialect, are either too ignorant or too accustomed to supernatural events to recognize the Whateleys' sinister actions.

Wilbur is a fascinating character—a man-beast who employs intricate measures to conceal his monstrous lineage. Both he and his twin emit a foul odor characteristic of the Old Ones and their progeny. Wilbur appears almost human from the chest up, but "from the abdomen a score of long greenish-grey tentacles with red sucking mouths protruded limply." He possesses dinosaur-like legs and other grotesque features. His brother is invisible except for brief moments when sprayed with powder. Enormous in size, with multiple large feet that leave big, round imprints, and capable of scaling sheer cliffs, the "horror" is terrifying even before its grotesque mix of human and "blasphemous" traits is exposed. While the brothers might seem absurd outside of "The Dunwich Horror," within the meticulously crafted backdrop of the story, they are genuinely chilling.