After having their home devastated by malevolent spirits, the Freeling family was unable to convince the insurance company of what happened to the property, so unable to afford a new place of their own, Steve, Diane, and their two children move in with Diane's mother. But they soon learn that this house was also built over haunted ground. One hundred years earlier, a deranged cult leader killed his followers in the area and now his spirit has returned, intent on kidnapping their youngest child, Carol Anne. Once again, the Freelings call upon psychic medium Tangina Barrons to help them, and also enlist a Native American spiritualist named Taylor.

After having their home devastated by malevolent spirits, the Freeling family was unable to convince the insurance company of what happened to the property, so unable to afford a new place of their own, Steve, Diane, and their two children move in with Diane's mother. But they soon learn that this house was also built over haunted ground. One hundred years earlier, a deranged cult leader killed his followers in the area and now his spirit has returned, intent on kidnapping their youngest child, Carol Anne. Once again, the Freelings call upon psychic medium Tangina Barrons to help them, and also enlist a Native American spiritualist named Taylor.