The parents of twelve-year-old “DJ” Walters leave town for the weekend, leaving him in the care of Elizabeth “Zee”. DJ has been spying on his elderly neighbor Horace Nebbercracker, who confiscates any item landing in his yard. After DJ’s best friend Charles “Chowder” loses his basketball on Nebbercracker’s lawn, DJ is caught by Nebbercracker trying to recover it, but the enraged owner apparently suffers a heart attack and is taken away by an ambulance. That night, DJ receives phone calls from the house with no one on the other end. Eavesdropping on Zee’s boyfriend Bones, DJ hears him tell Zee about losing his kite on Nebbercracker’s lawn when he was younger and that Nebbercracker supposedly ate his wife. Later, Bones sees his kite in the doorway of Mr. Nebbercracker’s house, but he is consumed by the house while retrieving it.
The next morning, a girl named Jenny Bennett is selling Halloween candy. DJ and Chowder see her going to Nebbercracker’s house and rush out to catch her before she is eaten by it. Jenny calls the police but is not believed.
The trio seek advice from Reginald “Skull” Skulinski, supposedly an expert on the supernatural. They learn that the house is a rare monster created when a human soul merges with a man-made structure and that it can only be killed by destroying its heart. They conclude that the heart must be the furnace and Chowder provides a cold medicine-filled dummy that should cause the house to sleep long enough for them to douse the furnace. Police Officers Landers and Lester thwart their plan and they are arrested when Landers finds the cold medicine stolen from Chowder’s father’s pharmacy inside the dummy. When the officers go to examine the house, it eats them and the car in which DJ, Chowder and Jenny have been shut.