The whole village mourns when General O'Leary (A.E. Matthews), owner of a hunting estate in South Ireland, is killed in an accident. His nephew, Jasper O'Leary (David Niven), takes over the state and soon has aroused the displeasure of all, with the exception of Serena McGluskey (Yvonne De Carlo), as much a schemer as he is a cad. Led by Thady O'Heggarty (Barry Fitzgerald), the villagers plot to drive Jasper away. They use the occassion of "O'Leary Night", when the ghost of the first O'Leary walks the halls, to create general chaos.

To inaugurate the annual fox and hounds hunt in the tiny Irish village of Rathbarney, the local squire, eighty-two-year-old General O'Leary, attempts to perform the initial horse jump but is thrown and mortally injured. On his deathbed, the general forgives all debts owed to him by numerous villagers and makes bequests to several who are not mentioned in his will, including his manservant, Thady O'Heggarty, and his cousin, Major Montague "Monty" McGlusky. Upon the general's death, the estate is inherited by a distant, great-nephew, Jasper O'Leary, who arrives from London just after Monty's recently widowed, impoverished sister Serena returns to the village. Serena's return worries Monty's other sister, Kathy, who fears that Serena may resume an earlier romance with Dr. Michael Flynn, who is currently Kathy's beau. After the villagers have welcomed Jasper at the railway station, Thady drives him to the house, which Jasper describes as resembling a mausoleum. From Thady, Jasper learns about one of his ancestors, Gen. Mike O'Leary, who killed fifty English foreigners and whose ghost still walks the house on O'Leary Night, causing those who see him to drop dead or go mad. At the pub, Thady introduces Jasper to several of the local characters and although Jasper agrees not to postpone the Hunt Ball, he makes it clear that he intends to collect all monies owed to the late general, which include substantial amounts from the publican, Dooley, and the bailiff Divarsian. Jasper also warns a local poacher to stay off his land. Although Regan, the local bookmaker, claims that the general owed him money, he is unable to prove it to Jasper's satisfaction. The villagers ask Monty to talk with Jasper on their behalf, but at the ball, Jasper learns about the bequests and informs Monty that he will honor none of the deathbed ramblings of an aged lunatic. Jasper further antagonizes the locals when he announces that this will be the last ball and that he will no longer support the hunt as he is opposed to blood sports. With this announcement, the villagers leave the ball although Serena stays to spar romantically with Jasper until Michael, enamored once more of Serena, finds them kissing and warns her that she is not to see Jasper again. Later, at the pub, several of the villagers react warmly to Regan's suggestion that someone should murder Jasper and they draw lots, but the assignment falls to Terence, the ineffectual pub assistant, who promptly faints, forcing the others to devise their own methods to eliminate Jasper. After pursuing two poachers, Lannigan and O'Connor, who have teamed up in a failed assassination attempt, Jasper collapses and is warned by Michael that he should see a heart doctor as he is in danger of dying from a sudden shock. Terence, meanwhile, fashions a bomb which he places in Jasper's car, but when Regan and his partner, working separately from Terence, attempt to sabotage the unoccupied car, the bomb explodes. When Jasper and Serena return from a trip to Dublin to buy a new sports car, they are met by a jealous Michael who tells Serena that they are through. After Serena declines an invitation to accompany Jasper on a trip to Italy, he proposes marriage instead, and she readily agrees. Word of Jasper's heart condition reaches the worthies at the pub and Thady, suddenly remembering that this is O'Leary Night, when the ghost walks, decides to kill Jasper by inducing a heart attack. He dresses up as the phantom, as does Monty, who has had the same idea. Simultaneously, other methods of assassination are being planned: Regan heads to the manor house with a sten gun; the poachers devise a decapitation scheme; Dooley, Terence and Divarsion intend to dynamite the house. Things go wrong, however, when the two "ghosts" meet and scare one another and when Terence, about to detonate the dynamite, discovers Jasper setting fire to the house as part of an insurance fraud. The would-be assassins have to abandon their attempts temporarily and assume their roles in the volunteer, village fire-brigade summoned to put out the fire. Midst all the confusion, Serena, Michael and the local priest arrive along with a solicitor who handled the general's legal affairs. The priest says that just before the general died, he gave him an envelope to be opened on O'Leary Night. The envelope contains a new will, which the general decreed should be destroyed if Jasper has proven to be a worthy successor. If Jasper has not endeared himself to the villagers, then the new will, which leaves everything to Monty, should be revealed. After the solicitor confirms that the new will is legal and binding, Jasper sees no reason to contest it, fearing more attempts on his life, and agrees to leave immediately. Serena decides to go with him, much to Kathy's and Michael's delight. The villagers are ecstatic, and when another O'Leary's ghost approaches them, they assume that he is one of their number and joke with him, but become panic-stricken when the ghost walks through a solid wall.