12-year-old DJ Walters (Mitchel Musso) spies on his neighbor, Mr. Nebbercracker, (Steve Buscemi), who takes any item that lands in his yard. DJ’s parents (Catherine O’Hara and Fred Willard) leave town for the weekend for a convention, leaving him in the care of Elizabeth “Zee”, (Maggie Gyllenhaal). Charles “Chowder” (Sam Lerner), DJ’s best friend, loses his basketball on Nebbercracker’s lawn. DJ tries to recover it but is caught by Nebbercracker, who rages at him before apparently suffering a heart attack and being taken away in an ambulance.
That night, DJ receives phone calls from Nebbercracker’s house. He enlists Chowder’s help to investigate the house. DJ eavesdrops on Zee’s boyfriend Bones (Jason Lee), who tells Zee about losing his kite on Nebbercracker’s lawn when he was younger. Later, Bones sees his long-lost kite in the doorway of the house, but is consumed by the house as he tries to retrieve it.
The next morning, a girl named Jenny Bennet (Spencer Locke) is on the street selling Halloween chocolates. DJ and Chowder see her going to Nebbercracker’s house, and they rush out to warn her, managing to catch her before she is eaten by the house. Jenny decides to call for the police, but when police officers Landers and Lester (Kevin James and Nick Cannon) arrive, they don’t believe their story, as the house doesn’t react to the kids’ teasing while the cops are there.
The trio seek advice from Reginald “Skull” Skulinski (Jon Heder), a strange video-game addict working in a pizza parlor who is claimed to be an expert on killing monsters. They learn that the house is a “domus mactabilis” (Latin for “deadly home”); a monstrous being created when a human soul merges with a structure. They assume the house is inhabited by Nebbercracker’s soul. The only way to kill the house is to destroy its heart; its source of life. They conclude that the heart must be the fireplace, as DJ realizes that the chimney has been smoking since Nebbercracker died. Chowder provides a dummy filled with drugs that should cause the house to sleep long enough for them to douse the furnace.
The plan almost succeeds, but Officers Landers and Lester (Kevin James and Nick Cannon) thwart it. Landers discovers the cold medicine inside the dummy, which Chowder took from his father’s pharmacy, and arrest them. The cops place the trio in the police car while they examine the house. The house eats Landers, Lester, and the car. DJ, Chowder, and Jenny escape the car but are trapped in the house.
The house falls asleep and they begin exploring. They fall into the basement and find a locked cage that DJ opens with a key he found on Nebbercracker’s lawn. They find the body of Constance the Giantess (Kathleen Turner), Nebbercracker’s wife, covered in cement. The house realizes they are inside and begins attacking them. DJ, Chowder, and Jenny force the house to vomit them outside by grabbing onto its uvula. The trio are surprised when Nebbercracker arrives home alive, but with his arm in a sling, revealing that the house is possessed by Constance.
Nebbercracker reveals that as a young man he met Constance, who was an unwilling member of a circus sideshow, and fell in love with her despite her obesity. After helping her escape, she and Nebbercracker began building the house. One Halloween, as children tormented her due to her size, Constance lost her footing and fell to her death in the foundations of the house, with the cement burying her body. Nebbercracker finished the house following Constance’s death, knowing it was what she would have wanted. Aware that Constance’s vengeful spirit made the house come alive, Nebbercracker tried to keep people away by pretending to be a child-hating old man.
DJ tells Nebbercracker it is time to let Constance go, but she overhears. Constance breaks free from the house’s foundation and chases the group to a nearby construction site. Nebbercracker attempts to convince Constance that she should die while holding a stick of dynamite, but Constance refuses. As she tries to eat him, Chowder fights the house off with a back hoe, causing her to fall into a pit. DJ is given the dynamite, and he and Jenny climb to the top of a crane while Chowder distracts Constance. DJ throws the dynamite into the chimney, destroying the house and Constance.
The trio see Nebbercracker with Constance’s spirit for the last time before she fades away. DJ apologizes to Nebbercracker for the loss of his house and wife, but Nebbercracker thanks DJ for freeing him and Constance after 45 years of being trapped. That night, children in their Halloween costumes are lined up at the site of Nebbercracker’s house, where DJ, Chowder, and Jenny help him return all of the toys to their owners. Jenny’s parents pick her up and DJ and Chowder decide to go out trick-or-treating, which they had previously thought they were too old for.
As the credits roll, those who were eaten in the house emerge from the basement.