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Strange things begin to occur as a tiny California coastal town prepares to commemorate its centenary. Inanimate objects spring eerily to life; Rev. Malone stumbles upon a dark secret about the town's founding; radio announcer Stevie witnesses a mystical fire; and hitchhiker Elizabeth discovers the mutilated corpse of a fisherman. Then a mysterious iridescent fog descends upon the village, and more people start to die.

After going their separate ways, Scooby-Doo, Shaggy, Velma, Daphne, and Fred reunite to investigate the ghost of Moonscar the pirate on a haunted bayou island, but it turns out the swashbuckler's spirit isn't the only creepy character on the island. The sleuths also meet up with cat creatures and zombies... and it looks like for the first time in their lives, these ghouls might actually be real.