On November 13, 1974, Suffolk County Police received a frantic phone call that led them to 112 Ocean Avenue in Amityville, Long Island. Inside the large Dutch Colonial house, they discovered a horrific crime scene that shattered the landscape of the typically peaceful community: an entire family had been slaughtered in their beds. In the days that followed, Ronald Defeo, Jr., confessed to methodically shooting his parents and four siblings with a rifle while they slept, claiming "voices" in the house drove him to commit the grisly murders.

One year later George (Ryan Reynolds) and Kathy Lutz (Melissa George) come across a beautiful river-front colonial home being sold for a steal, they suspect a catch. Once informed that the home was the site of a grisly mass murder, they decide to buy the house anyway and move in, bringing with them Kathy's three children from a previous marriage. While no one can deny that the house is rife with spooky sounds, the family members try to put their fears at bay. Shortly after settling in, bizarre and unexplainable events begin to occur. Nightmarish visions and haunting voices from an evil presence are still lurking within the house. Kathy's daughter starts to act bizarrely, ending up in a variety of life-threatening situations, led by her new, not-so-imaginary friend Jody (one of the children slaughtered in the house years before by her older brother). Likewise, something strange seems to be happening to George. His usually sweet demeanour is replaced with a hostile one, and he starts cruelly taking out his aggression on Kathy's children. Kathy's original assumption that a house cannot be evil is challenged as she watches her husband transform into the sort of man that just might be capable of murdering his family.