When painter Monty Crandall, who works for a trashy magazine published by Max Atterbury, meets Susan Beecher, his fiancée, Phyllis Beecher's aunt, he asks Susan if she will pose for him. She agrees and when the painting, a grotesque caricature of Susan and her French poodle, François, is published on the front page of the magazine, Susan complains to her lawyer, T. O'Connor Scott. Scott then tries to contact Monty and learns that he has gone to stay at his home in Connecticut, Haunted Hill Farm. Monty, who is intrigued by parapsychology, recently purchased the house, which is supposed to be haunted by the ghost of Benedict Arnold. As Monty and Phyllis conduct a séance under the supervision of parapsychologist Prof. Jacques Dubonnet, Irene Winters, who wants to be Monty's sweetheart, arrives and asks Monty's butler Eric to interrupt the séance. When Irene sees the lipstick that Phyllis has left on Monty's cheek, she jealously raises Phyllis' ire by saying that her husband Bill has found out about her affair with Monty. Just then, Bill breaks into the house brandishing a gun and threatening Monty, who quickly escapes into a raging storm. A week later, Monty is still missing and Phyllis can barely be consoled by Eric. A short time later, the police call Eric and inform him that they have found a dead body in Monty's burned out cabin, and believe that it is Monty. Actually, it is the body of a man who had broken into the cabin, and, unknown to anyone, Monty has just returned to his house and decided to lay down for a nap. Upon hearing the news of Monty's death, Atterbury decides to conduct a séance to contact his spirit, and does so in the room in which Monty is sleeping. When the séance participants hear Monty's yawning and see him struggling with a white sheet, they think he is a ghost and quickly leave the house. Monty explains to Eric, who has fainted, that he is not a ghost. Monty feels terrible that Phyllis also believes he is dead, but Eric insists that they must continue pretending that he is dead to avoid his recent travails with Bill, Susan and even Atterbury, who is not happy about Susan's lawsuit. Later, when Eric superstitiously raps three times on the wall, a real ghost suddenly appears and introduces himself as Timothy Beecher, Susan's late husband. After proving that he really is a ghost, the gentle Timothy says he has been waiting for years for a chance to get his revenge on Susan, who never let him enjoy life. He reveals that he knows where all of the "skeletons" are and promises to help Monty get out of the lawsuit and prevent Bill from hurting him. Just as Timothy is about to reveal everything, though, he suddenly dematerializes and Eric and Monty are forced to fend for themselves. That night, they don white sheets and at midnight sneak into Susan's room, where they waken her and, using their best "ghostly" voices, pretend to be Monty and Timothy, advising her to drop her lawsuit. Later, when Monty goes to Phyllis' room, she also thinks he is a ghost at first, but is happy to find that he is alive. After the men leave, Susan, who now realizes that "Timothy's" voice was actually Eric, tells Phyllis that Monty really is alive and says that she is going to call the police. Phyllis then goes to Monty's house to warn him, but finds Irene there and runs off when Bill arrives with his gun. When Susan's lawsuit comes to trial, the case looks bad for Monty until he invites Timothy's ghost to appear. Although he cannot materialize, Timothy can speak, in a very low whisper, and tells Monty's lawyer, Murgatroyd, then the judge, the nature of Susan's most embarrassing secret. Timothy also whispers to Monty a secret that he can use against Bill. Susan quickly withdraws her suit to prevent her secret from being made public and Bill leaves immediately with Irene when Monty reveals his secret. With his work done, Timothy's spirit leaves with Eric, while Monty and Phyllis happily embrace.