On Christmas Eve Arthur Kipps' stepchildren invite him to tell a ghost story. He has one but is too disturbed to tell it, so he writes it down.
In the story, a young Arthur Kipps is sent by his employer to settle the affairs of Mrs Alice Drablow, of Eel Marsh House. The house is cut off from the mainland at high tide. At her funeral, Arthur sees a sickly-looking young woman dressed in black. No one else sees her.
Keckwick, caretaker, drives Arthur to Eel Marsh House where he sees the woman again. He finds piles of Mrs Drablow's papers to sort and is haunted by the sound of a pony and trap.
He stays overnight at the house and is persuaded by Samuel Daily, a local landowner, to take his dog, Spider, for company. The dog and Arthur are spooked by rumblings, cries and bumps in the night.
A locked door becomes mysteriously unlocked and Arthur finds a nursery filled with toys and a rocking chair in motion.
Samuel Daily rescues Arthur from the house and eventually tells him how a child dies by accident each time the woman in black is seen.
Arthur returns to London with his fianc茅e Stella. They are soon married and have a child together.
Arthur sees the woman in black again in London and moments later his wife and child die.