In the suburban haven of Cuesta Verde, California, the Freeling family enjoys the comforts of modern living. Steve Freeling (played by Craig T. Nelson) is a thriving real estate agent, whose world revolves around his wife, Diane (JoBeth Williams), and their three children: Dana (Dominique Dunne), teenage daughter, and her two preteen siblings, Robbie (Oliver Robbins) and Carol Anne (Heather O’Rourke).

Life takes a peculiar turn when Carol Anne starts sleepwalking and engaging in cryptic conversations with an unresponsive television set. The family’s tranquility is shattered further when their pet bird tragically dies, prompting a somber burial service. That night, as Carol Anne wakes again, she speaks to the television, only to have a mysterious force penetrate the screen, resulting in a violent quake felt only by the Freelings. The chilling realization comes when Carol Anne eerily announces, “>They’re here.”

The following breakfast is marred by strange occurrences, with glasses shattering and cutlery bending seemingly without explanation. When Diane inquires about the identity of “they,” Carol Anne innocently responds, “The TV people.” Initially, the supernatural forces engage in harmless antics that amuse Diane, such as rearranging the kitchen chairs. However, the antics escalate dramatically—on what seems like an ordinary night, a thunderstorm awakens a malicious tree, seizing Robbie through their bedroom window. But this aberration is merely a ploy by the supernatural entities, meant to keep Carol Anne’s parents distracted.

As Carol Anne is pulled through her closet into another dimension, Steve rescues Robbie, only to discover Carol Anne is missing. Anxiously, they scour their home while strange noises from the television lead them into a state of alarm. Desperate, Steve enlists the help of parapsychologists from UC Irvine, led by Dr. Lesh (Beatrice Straight), who are astounded by the manifestations they witness in the Freeling home. The team is overwhelmed by the paranormal phenomena they experience as toys float and laughter echoes throughout the children’s room.

The parapsychologists bring forth enlightening information about the disturbance, explaining the distinctions between a poltergeist and a haunting. After witnessing several unsettling episodes, including Carol Anne communicating through the television, the team decides they require more assistance. Unable to bear the mounting tension, Dana seeks refuge with friends, while Robbie is temporarily sent to stay with his grandmother for safety.

The plot thickens when Steve learns from his boss, Teague (James Karen), that their housing community was built over an ancient burial ground—an act that deeply disturbs him, expressing, “>that’s sacrilegious.” With heightened awareness of the spirits that linger in their home, they are introduced to Tangina Barrons (Zelda Rubinstein), a psychic medium who reveals that Carol Anne’s unique energy has drawn confused spirits, further complicated by the presence of a malevolent entity preying on her newfound connection.

As a plan forms to navigate the portal within the children’s bedroom closet, Diane insists on being the one to retrieve Carol Anne, believing she will only respond to her mother. As Diane bravely ventures into the other realm, chaos ensues, resulting in a heart-stopping confrontation with the Beast, the manifestation of pure malice that triggers a harrowing climax. After a dramatic sequence of events, Diane manages to return with Carol Anne, though the ordeal leaves both of them shaken—Diane’s hair, now streaked with grey, is a testament to their trials.

With the supernatural turmoil still unresolved, the final night in their home reveals increasing danger. The horrifying entity retaliates, endangering the children and forcing Diane to confront unimaginable terror when the now sentient clown doll ensnares Robbie. As grotesque images and noises stem from the house, Diane bravely fights through the chaos to rescue her kids amid a storm of horrific happenings that explode from the ground below.

In a dramatic standoff, Steve arrives with Teague just in time to witness the carnage caused by these awakened spirits. In a fit of realization about the moral debacle of their housing project, fueled by righteous anger, Steve denounces Teague as the chaos reaches its zenith. As the family narrowly escapes the malevolent grasp of the entity, the house itself implodes, drawn into a dimension from which it can never return.

Exhausted and profoundly scarred from their experiences, the Freeling family seeks solace in a hotel, carefully casting aside the ominous television set, determined to never again cross paths with the unexplained horrors that lurked in their once-happy home.