Steven Price (GEOFFREY RUSH) is an amusement park mogul who delights in scaring the dickens out of those who choose to ride his new attractions. His wife, Evelyn (FAMKE JANSSEN), seems to have had enough of him, but nonetheless wants him to throw her a birthday party at the long-closed Vannacutt Psychiatric Institute for the criminally insane.
Empty after a deadly patient rebellion in the ‘30s save for a family that's taken care of the place, Evelyn thinks it will be a fun place for a party. Price agrees, but destroys her guest list, substituting his own instead. Little does he know, however, that his list is mysteriously deleted and replaced by a quartet of strangers.
Among them is Eddie Baker (TAYE DIGGS), a former pro baseball player, Sara Wolfe (ALI LARTER) a woman who masquerades as her former boss, Dr. Donald Blackburn (PETER GALLAGHER), and Melissa Marr (BRIDGETTE WILSON), a woman willing to do anything to make it on TV.
Arriving at night and greeted at the Institute by Watson Pritchett (CHRIS KATTAN), its latest caretaker, the group heads inside where they meet Steven and Evelyn who both believe the other altered the guest list. To make the evening more fun, Steven announces not only that the building is reportedly haunted -- a fact that Pritchett acknowledges from firsthand experience -- but that he'll pay anyone who can spend the entire night there -- without dying or running away in fright -- one million dollars each. Should someone leave or die, their money would then be split among the "survivors."
The running away aspect is soon resolved, however, as the building's massive but archaic security system closes off any and all exits, doors and windows, effectively sealing everyone inside. From that point on and as the night progresses, the unwillingly assembled group attempts to get out while trying to figure out whether the eerie and seemingly lethal occurrences within the house are just Price's trickery or is a result of the building being haunted.