The day before Halloween, DJ Walters' parents go off to a convention, leaving him in the care of an evil babysitter named Elizabeth, who prefers to be called Zee. Zee has no interest in looking after DJ, preferring instead to spend time with her boyfriend Bones.
DJ lives across the street from Mr. Nebbercracker, a grumpy old man who takes and keeps anything that lands on his lawn. Chowder, DJ's best friend, accidentally loses his new basketball in Nebbercracker's yard. DJ goes to get it but Nebbercracker sees him and stops him. The old man flies into a fierce rage, yelling at the boy before collapsing, seeming to have suffered a heart attack, and being taken away in an ambulance. In the evening, DJ gets phone calls from Nebbercracker's house, even though nobody is there. He believes that the Nebbercracker's ghost has made the house come to life. DJ overhears Bones talking about a kite which he lost to Mr. Nebbercracker when he was a small boy. When Bones leaves for home, he sees the kite which he lost long ago in the doorway of Nebbercracker's house. When Bones goes to retrieve the kite, the house eats him.
The following day, a girl named Jenny is out selling candy for homeowners to give to trick-or-treaters. DJ and Chowder see her approaching Nebbercracker's house and rush to warn her not to go near the dangerous building. The two boys tell Jenny that the house has become a monster. After she has heard their story, she calls the police. Two police officers arrive to investigate the house. When the house fails to do anything, the police officers conclude that the children were just playing a prank on them and leave.
DJ and Chowder take Jenny to the pizzeria where Reginald "Skull" Skulinski, an overweight video-game fanatic works. The two boys say that Skull is an expert monster-slayer. Skull tells them that the house has merged with a vengeful human spirit, which the children think must be that of the late Mr. Nebbercracker, and that the only way to kill it is to destroy its heart. DJ says that the chimney has been smoking ever since Nebbercracker was taken away, so they decide that the furnace must be the house's heart. The children plan to put the house to sleep, giving them enough time to extinguish its furnace. Chowder obtains some cold medication, which will make the living house drowsy, from his father's pharmacy and stuffs it inside a dummy. The children's plan almost succeeds, but the two police officers who had appeared earlier find them with the dummy full of drugs and arrest them. The officers put the three children in the back of their police car while they go to look inside the house. The house swallows the two police officers and the car with the children inside it . DJ, Chowder, and Jenny manage to get out of the car but find themselves trapped inside the house.
When the house falls asleep, the children fall into the basement and discover the body of a very large woman covered in cement. The house realizes that the children are inside it and starts to attack them. DJ, Chowder, and Jenny grab onto the house's uvula, forcing it to vomit them out. Outside the house, the children are amazed to see Mr. Nebbercracker alive, returning from hospital with his arm in a sling. Nebbercracker tells them that the house is possessed by the spirit of the obese woman that they found in the basement, his late wife Constance, known as Constance the Giantess. Nebbercracker tells them that, against her wishes, Constance used to work in a circus sideshow. He rescued her, married her and began building a house for her. One Halloween, while she was working on the house, some children tormented Constance because of her size. She lost her footing and fell to her death in the house's foundations, her body becoming buried beneath layers of cement. Nebbercracker finished the house, believing that it was what Constance would have wanted, before discovering that Constance's angry ghost had made the house come to life. To keep children away from the dangerous house, Nebbercracker pretended to be a child-hating old man.
DJ tells Nebbercracker it is time for Constance to move on. The house overhears him, breaks free of its foundations and chases Nebbercracker and the children to a construction site. Chowder fights the house off with a back hoe, causing it to fall into a pit. DJ throws a stick of dynamite down the house's chimney, destroying it and setting Constance's spirit free. DJ tells Nebbercracker that he is sorry that the old man has lost his house and his wife but Nebbercracker thanks the boy for finally releasing his wife's trapped spirit.
That night, costumed trick-or-treaters line up at the former site of Nebbercracker's house. Nebbercracker, DJ, Chowder, and Jenny give back all the toys that Nebbercracker had taken from them over the years. As the movie ends, all the people who had been eaten by the house come out of its basement.
- Mitchell Musso - DJ Walters
- Sam Lerner - Chowder
- Spencer Locke - Jenny Bennett
- Steve Buscemi - Horace Nebbercracker
- Kathleen Turner - Constance Nebbercracker
- Maggie Gyllenhaal - Elizabeth, known as "Zee"
- Jason Lee - Bones
- Kevin James - Officer Landers
- Nick Cannon - Officer Lester
- Jon Heder - Reginald "Skull" Skulinski
- Fred Willard - Mr. Walters, DJ's father
- Catherine O'Hara - Mrs. Walters, DJ's mother
- Ryan Newman - Eliza, a 5-year-old girl