Zach Cooper (Dylan Minette) and his mother Gale (Amy Ryan) move to the town of Madison, Delaware where Gale is starting a new job as the high school vice principal. It's been a year since the death of Zach's dad and he's still getting over it. The only person they know in town is Gale's sister Lorraine (Jillian Bell), who gives Zach a bedazzled hat as a gift that his mom makes him wear.
While Zach goes to get his belongings into the house, he meets the pretty girl next door, Hannah (Odeya Rush). She is called into her house by her dad, Mr. Shivers (Jack Black). He warns Zach with intense seriousness to stay away from Hannah, or else bad things will happen.
Zach starts school and doesn't want to walk in with his mom for fear of it getting awkward. The school holds an assembly to welcome Gale to the staff. Zach meets and befriends a dorky kid named Champ (Ryan Lee) as they watch Gale make corny jokes. Champ asks Zach if he's gonna take anyone to the upcoming dance. Zach says no, all while trying to keep an eye out for Hannah.
That night, Zach finds Hannah by her fence and asks why he didn't see her at school. She says she's homeschooled. When Zach asks if there's anything fun to do around town, Hannah guides him through the woods to an abandoned amusement park. They climb the Ferris wheel and sit on one of the carts with a nice view of the town. They return home, and Shivers scolds both kids for being together.
Zach later overhears arguing coming from next door, ending with what sounds like Hannah screaming. Zach calls the cops. Two incompetent officers, Stevens and Brooks (Timothy Simons and Amanda Lund), show up at Shivers' door with Zach and Gale to question him. Shivers claims to be alone and says that Hannah left a day earlier. Another scream is heard, but Shivers shows it came from a movie. The officers think Zach wasted their time and let him off with a warning.
Still suspicious, Zach lures Shivers away from home by pretending to be a cop and asking him to go down to the station. When Shivers leaves, Zach calls Champ to help him. They sneak into Shivers' home through the basement and go upstairs. There, they find an entire bookshelf filled with locked manuscripts of old "Goosebumps" stories. Zach finds the key and unlocks "The Abominable Snowman of Pasadena". Hannah then shows up and asks with fear if they unlocked the book. Zach accidentally pulls the book open, bringing to life the massive Abominable Snowman. He nearly attacks the kids when Champ screams. Hannah grabs the book and chases after the Snowman, with Zach and Champ following. They don't see that the manuscript for "Night of the Living Dummy" unlocks by itself.
The kids follow the Snowman to a skating rink where they find it feasting upon vending machine candy. The monster spots the kids as Hannah prepares to suck the Snowman back into the book. The book gets knocked out of her hand, forcing her to run with the guys. The Snowman corners them and tries to attack, only for Shivers to appear and pull him back into the book.
On the drive home, Zach and Champ realize that Shivers is really R.L. Stine, the author of the "Goosebumps" series. As they go to gather the rest of the books, Stine admits to the kids that he created the monsters long ago to terrorize the people that made fun of him as a child, but he had to really lock the monsters away when they became real. Stine sees in horror that "Night of the Living Dummy" is open, which means he is now face-to-face with his nemesis, Slappy The Dummy (voiced by Jack Black). Slappy swipes every last book and begins to open them to unleash every monster upon town, and then burning the books to prevent the heroes from trying to suck them back inside.
Slappy first brings out murderous lawn gnomes that attack Stine and the kids. They smash the gnomes to pieces, but they put their pieces together, forcing the heroes to keep running.
Zach tells Stine to write another book and suck all the monsters back in, but Stine needs his own Smith-Corona typewriter, which is at the high school while the dance is taking place. They can't call for help because Slappy used a plant monster to take down the cell phone towers. As they drive toward the school, the heroes are attacked by the Invisible Boy, and then a giant praying mantis. Stine drives away and their car rolls over by the supermarket. The mantis crushes the car after the heroes retreat into the supermarket. Lurking in there is the Werewolf of Fever Swamp. He spots the heroes and chases them through the store. Stine tried to throw off the creature by masking his scent, but it doesn't work. They run into the back and hold it off before it bursts out. Lorraine arrives and hits the Werewolf with her car and knocks it into a dumpster, having already encountered a demonic poodle. Zach tells Lorraine to get the cops while he and the others continue toward the school. When Lorraine gets to the station, she finds that the cops and several townspeople have been frozen by alien monsters. Slappy emerges and gets Lorraine frozen as well.
The heroes cut through the cemetery to get to the high school. Hannah's hood gets caught by a statue, and when Zach pulls it off, the moonlight shines on Hannah, making her look blue and transparent. Ghouls and zombies begin to terrorize the heroes. They run away in time and leave the monsters in the cemetery.
They finally make it to the high school and find the typewriter. Zach quietly pulls Stine aside and confronts him about Hannah. Stine admits that she is one of his creations, "The Ghost Next Door," and that Hannah was born from his loneliness after losing his wife, but Hannah doesn't know she isn't real. Stine goes to write a new "Goosebumps" story while the kids buy him some time. Zach and Hannah earn Gale before Champ makes Zach warn everyone from onstage about the monsters. Although they laugh him off, they believe him when the mantis breaks through the ceiling and snatches up a teacher. The students and staff run to seal off the exits and run for safety.
Stine writes in the auditorium and is nearly complete until Slappy shows up, having unleashed even more monsters upon the town to create an army. The evil dummy breaks Stine's fingers before he can finish the story. Zach and Hannah find him and grab the typewriter. Meanwhile, the Werewolf gets into the school and nearly attacks Champ's crush Taylor (Halston Sage) until Champ bites into the Werewolf with a silver filling. Taylor kisses Champ for saving her.
The monsters break into the school and start attacking. Zach comes up with a plan using some explosives from the chem lab. They use a dummy in a bus to lure the monsters away and have the bus blow up to distract them while Zach, Hannah, Champ, and Stine make it back to the amusement park. Slappy corners them in the house of mirrors and chastises Stine for keeping him locked away in a book. He then unleashes one last monster, The Blob That Ate Everyone. Stine gives the book pages and typewriter to Zach so he can finish the story. He climbs the Ferris wheel with Hannah and Champ while the Blob grabs Stine. Zach finishes the book properly, but the mantis shows up and knocks the wheel lose, making it roll through the woods.
The kids make it to an open spot where they can open the book. Zach hesitates because he knows it would mean Hannah will get pulled into the book as well. She also knows of her fate and opens the book for him, creating a portal that begins to pull all the monsters back into the book, one by one. Slappy holds onto Stine briefly until he kicks the dummy into the book. Zach holds onto Hannah as she turns into a ghost. Hannah tells him to let go and kisses him before she gets pulled in. Zach gets the book, and he, Stine, and Champ start to miss Hannah.
Later on, the town is recovering from the damage. Stine becomes a new English teacher to Zach and Champ. After class, Stine reveals to Zach to he brought Hannah back to life by writing a new book for her. He then burns the manuscript so Hannah can never leave. She leaves with Zach. Stine then goes over to check on his typewriter. It then starts writing "The Invisible Boy's Revenge." The creature cackles as Stine screams.
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