Caution: Wikipedia contains spoilers
Based loosely on their California theme park ride of the same name, the film stars Eddie Murphy and Marsha Thomason as Jim and Sara Evers, African-American proprietors of "Evers and Evers Real Estate" and parents of 10 year old Michael and his 13 year old sister Megan (played by Marc John Jefferies and Aree Davis). Jim is a workaholic who has not been spending time with his family, to the disapproval of his wife. On a weekend trip in which he has promised to devote time to the family, they make a detour through the swamps of New Orleans to The Gracie Mansion, a decaying but valuable property. The owners have contacted Sara with interest in selling.
Once arriving a violent rainstorm erupts, and they are led inside by manservant Ramsley (Terence Stamp) who is immediately disturbed that Sara did not come alone. They are introduced to Master Gracie (Nathanial Parker), the heir of the house, and invited to stay the night as the roads have flooded. The children are sent to one bedroom, the parents to another.
As the parents are separated and Jim finds himself trapped in a secret passage, the children are led by a floating blue orb into an attic room where they discover an antiquated painting that looks exactly like their mother. They are encountered by another maid and butler who work for the mansion who warn them of impending danger. They discover that the two are actually ghosts, as is Master Gracie, and that he thinks their mother is his lost suicided lover Rebecca returned to him from beyond the grace.
Meanwhile Jim discovers the animated head of gypsy Madame Leota (Jennifer Tilly in a critically praised performance), stored magically inside a crystal ball. Through her help he is led to his children and together they follow her instructions through a ghost populated crypt to find a key that will help them flee the mansion. They learn that there is a curse binding the souls of everyone who has died in the mansion to walk it's premises until it is broken.
Jim and his daughter go into a crypt (per the gypsy's instructions) and locate the key in question, only to be attacked by hundreds of zombie-corpses. They find themselves trapped in the crypt, but his 10 year old son overcomes his fear of spiders (which are crawling all over the outside of the crypt door) and frees them just in time.
They use the key to unlock a trunk inside which is a letter from Rebecca declaring that she loved Master Gracie. It is revealed that Ramsley, also a ghost, poisoned Rebecca to prevent an interacial relationship between she and Master Gracie. He then traps the children in a trunk suitcase and literally throws Jim out of the house, trapping him inside. He confronts Sara and makes it clear that she will either proceed with the marriage (and a suicide) to help break the curse, or that her children will die.
Jim, attempting to break back into the mansion but finding it magically sealed, sits outside in vain until the head of Madame Leota comedically rolls up to him to encourage him to keep trying. He drives his car through the wall just in time to stop the wedding and confront Master Gracie with the truth. When all is revealed, Ramsley is sucked into the depths of hell. Unfortunately Sara has had enough of the poison given to her before the wedding to die. Just in time, Rebecca's spirit moves into Sara's body and revives her, breaking the curse and bringing her back to life.
Thus all of the spirits in the mansion, including Rebcca, Master Gracie, and the helpful maid and butler ascend into the light of Heaven, their curse broken. Jim has learned an important lesson about family, and his son and daughter have learned bravery in the face of evil. The family, now in possession of the deed to the house, head back home (with the encased head of Madame Leota in the back seat).
The film received mixed commentary. Many critics felt Murphy's performance was out of place; Thomason's (a British actress affecting an American accent) cold. Others praised the film for never wavering from it's dark and serious message of racial tolerance (not to mention it's horrific imagery) despite being directed at children. The film did very well in its opening weekend, grossing approximately $35,000,000 in the United States.