"The Canterville Ghost" begins with the sale of an old British mansion called Canterville Chase to Horace B. Otis, an American minister. Though the former owner, Lord Canterville, warns Mr. Otis that the mansion is haunted, Mr. Otis is not worried and replies that ghosts do not exist. Soon after, Mr. Otis moves into the Chase with the rest of his family: his wife, Lucretia; his eldest son, Washington; his fifteen-year-old daughter, Virginia; and his two young twin boys. Upon moving in, Mrs. Otis notices a dull red stain on the floor and requests that it be cleaned. Their housekeeper reveals that it is a bloodstain from the murder of Lady Eleanore de Canterville, who was killed in 1575 by her husband, Sir Simon de Canterville, and that it cannot be removed. She warns Mrs. Otis that Sir Simon's guilty ghost still haunts Canterville Chase. Dismissing the housekeeper's story as nonsense, Washington quickly pulls out a container of Pinkerton's Champion Stain Remover, scrubbing it onto the spot until the stain is gone. As soon as the stain is removed, lightning flashes, and a peal of thunder rocks the house. The housekeeper faints in terror.
The next morning, the Otises find that the stain has mysteriously returned. For the next few days, they routinely clean the stain only to see it reappear the next morning. Intrigued, the Otis family decides that the house is, in fact, haunted. A few nights later, Mr. Otis is awakened in the middle of the night by a clanking noise. Venturing into the hallway, he encounters the ghost of Sir Simon. Rather than being frightened by Sir Simon's glowing red eyes, matted hair, and rusty manacles, Mr. Otis politely insists that the ghost oil his chains and gives him a bottle of Tammany Rising Sun Lubricator for this purpose. Utterly humiliated, Sir Simon retreats down the hallway until he encounters the twins, who throw pillows at his head. Returning to his chamber, Sir Simon remembers his long and successful career as a ghost, fuming that never in three hundred years of haunting maids and guests has he been so insulted. Determined to scare these "wretched modern Americans," Sir Simon stays up all night plotting his revenge.
Though the bloodstain remains, the Otises humorously note that it is changing in color on a daily basis. Virginia Otis, however, does not find the changing stain amusing and appears inexplicably distressed by it. One day, the family discovers Sir Simon in an embarrassing position: he has fallen over while trying to put on a suit of armor. The twins shoot at him with pea shooters and when Sir Simon tries to scare the family with his most evil laugh, Mrs. Otis adds insult to injury by suggesting that he may be suffering from indigestion. For several days afterward, Sir Simon is ill and keeps mostly to his room. Soon, however, he resolves to make a third attempt at scaring the Otises and picks out a suitably terrifying outfit. As he makes his way to Washington's room, however, he is stopped by the twins, who are disguised as a ghost. Believing them to be a real ghost, Sir Simon flees in utter terror. Depressed, Sir Simon retreats from his ghostly duties, deciding not to replace the bloodstain and...
