Widowed mother, Gwen Piper, always refuses to let her kids, Marnie, Dylan, and Sophie, go out on
Halloween. Gwen's mother, Aggie, shows up for her annual Halloween visit. The children are happier to see Aggie than Gwen is, as Aggie openly encourages the children to get more involved in Halloween. Aggie and Gwen are secretly
witches, but Gwen is determined to live a normal life as a mortal instead. Aggie reads the children a bedtime story called "Halloweentown", about a mystical place where witches, vampires and monsters live in peace away from mortals. Sophie points out a drawing of a witch in the book that resembles Marnie; Aggie does nothing to stop Marnie from imagining such a thing. After saying goodnight to the children, Gwen and Aggie get into an argument, and Marnie eavesdrops on them. Gwen is angry that her mother encourages the children to enjoy Halloween, and insists Marnie will be raised as a mortal, like her father was, rather than a witch. Aggie wants to train Marnie before she turns 13, as at this point without training, she would lose her powers. Aggie then asks Gwen for help; citizens of Halloweentown have been disappearing, and while Gwen suggests the missing have simply moved, Aggie believes that foul play is involved. When Aggie leaves to return home, Marnie and Dylan covertly follow her. They see Aggie getting onto a magical bus, sneak onto it, and arrive in Halloweentown, discovering the town is real. As soon as they arrive, Marnie and Dylan realize that Sophie had snuck onto the bus with them. The three begin looking for Aggie, and are approached by Kalabar, the
mayor of Halloweentown, who gets them a cab driven by Benny, a
skeleton who tells corny jokes. Benny drives the children to their grandmother's
mansion, and Aggie decides not to take them back to their home immediately. She says she will start Marnie's witch training, but has to take care of "the bad thing" first: in her cauldron, a vision of a hooded figure appears, laughing maniacally. She says she must activate
Merlin's talisman with a spell and potion to defeat the evil creature. Failing to light the talisman with "instant" potion, Aggie takes the children to town for ingredients. The family encounter Luke, a
goblin who was made a handsome human by a "shadow creature". He makes a clumsy pass at Marnie, which she turns down. Gwen arrives in Halloweentown to retrieve the children, to Marnie's objections. Gwen cannot find another bus back to the mortal world, so Dylan suggests they see the mayor for help. Gwen is shocked to see that the mayor is Kalabar, who turns out to be an ex-boyfriend of hers. Kalabar then leaves to handle another problem but says he'll help them when he returns. Meanwhile, Aggie encounters Luke, who tells her that the evil creature wants Merlin's talisman, and takes her to him. Gwen and her children see Aggie and Luke walking somewhere. Sensing Aggie might be in trouble, they follow Luke and her to an abandoned movie theater. In the movie theater, Aggie sees that some of the Halloweentown citizens have been frozen in time, and meets the hooded demon from the movie screen. She declines to give the talisman to the demon. Gwen and the children enter the theater as Luke rushes out in fear. The demon freezes Gwen and Aggie. The children escape, and collect the necessary ingredients—the hair of a
werewolf, the sweat of a
ghost, and a
vampire's fang—to make the potion that will activate the talisman and unfreeze the others. They then realize they must place the talisman in the large
jack-o'-lantern in the center of the town to defeat the demon. When they arrive to install it, the demon appears and reveals himself to be Kalabar, who tries to persuade the townspeople to join him in taking over the mortal world. With Luke's help, Marnie climbs onto the jack-o'-lantern and attempts to place the talisman inside, but Kalabar casts a spell to freeze her. As she is about to pass out, Marnie drops the talisman inside the jack-o'-lantern, which causes it to illuminate. This unfreezes her and everyone trapped inside the theater, and weakens Kalabar. The children are then reunited with their mother and grandmother, who also learn that Kalabar is the demon. He is bitter that Gwen chose to marry a human instead of him, and obtains the talisman and says he will use it to become the ruler of both the mortal and magical world. Dylan is revealed to have gotten magic powers of his own. He joins Gwen, Aggie, and his sisters in defeating Kalabar. Kalabar is vaporized and Aggie retrieves the talisman. Luke is restored to his goblin appearance, though receives a kiss from Marnie on the cheek. Aggie decides to stay in the mortal world for a while to spend more time with her grandchildren, and Aggie and Gwen decide to train Marnie as a witch. They get on the bus and blast off back into the mortal world. ==Cast==