In 1693 Salem, Massachusetts, Thackery Binx is awakened and notices that his little sister Emily is being lured into the woods by an old woman while his best friend Elijah shows that the witches in the woods are conjuring. Thackery gives chase, arriving at a cottage as Emily is led inside by one of the 3 women. The cottage is home of the Sanderson sisters, Mary, Sarah and Winifred. It is revealed that they are brewing a potion with which to suck the life force out of young children to use as their own. Thackery is too late, however and Emily drinks the potion. After subduing Thackery with her powers, Winifred, along with Mary and Sarah share the life force from young Emily making them young ("Well, younger"). When Thackery calls Winifred a hag, she decides not to kill him as punishment and to their amusement the trio transform Thackery into a black cat who must live forever with the guilt of letting his sister die. The townspeople, led by Thackery and Emily's parents come and capture the sisters to hang them; however Winifred casts a curse that on Halloween night when the moon is full a virgin will summon them back from the dead so they can claim all the lives of the children in Salem.
300 years later, a teenager named Max Dennison is angry because of the fact that he had to move to Salem from his hometown of Los Angeles, California. He is also less enthusiastic and skeptical of the story of the Sanderson Sisters. One day, he is accosted by two numskull dimwitted high school bullies Jay and Ernie "Ice" who steal his shoes when he doesn't have cash or bud. His younger sister, Dani, on the other hand, is completely enthralled with the holiday and dresses up as a witch for Halloween night. Max, who objects to taking Dani out trick-or-treating, is suddenly forced to by their parents as they will be going to the Town Hall for an adult party and won't be able to take her. After another confrontation with Jay and Ice, Max upsets Dani and apologizes for his behavior. They arrive at a large mansion that just so happens to be the home of Max's crush from school Alison (Vinessa Shaw); when Dani expresses an interest in the Sanderson sisters, they leave the party and go to the old Sanderson house, a former museum which was soon abandoned due to "spooky things" happening there. While they're there, Max finds the Black Flame Candle, which is rumored to raise the spirits of the dead on Halloween Night if lit by a virgin. Still disbelieving all the "hocus pocus" he lights the candle and the house suddenly comes to life; candles light in place of the glass bulbs, the floorboards glow green and shake, the cauldron lights and it culminates in the sisters reentering their front door for the first time in three centuries. Mary quickly finds Dani with her power to sniff out children, but Max interrupts before they can partake on a long overdue dinner. He tricks the trio into thinking he is a wizard using a lighter to summon the "Burning Rain of Death" (the fire alarm system) in the house. Before he can leave, however, Binx, who can now talk as a cat makes Max grab the spellbook so the women can't create their life stealing potion. They soon give chase and Binx leads the kids to a graveyard, telling them stories of the sisters, Alison deduces who he is. As the witches can't set foot on hallowed ground, and air assaults are useless to the quickly moving children, Winifred summons her old lover Billy Butcherson, a zombie whose mouth was sewn shut with a dull needle so he can't divulge Winnie's secrets, to chase them. They escape through the sewers and Max knocks Billy's head off.
The sisters encounter a bus and Sarah is driving it when Binx emerges from the sewers. Max and the others witness his death and resurrection due to the curse that he can't die. Meanwhile, unable to track Max and the others, the sisters encounter costumed children furthering their confusion of Halloween Night. After an encounter with a man dressed as Satan and mistaking him for their true master who is wed to Medusa (a woman with snake-like curlers in her hair), Winnie realizes the truth of Halloween, while their broomsticks are stolen by children dressed as them. Max and the others try to tell the police, but find a man costumed as a police officer instead. They go to warn their parents, but the sisters arrive and in a big song and dance number, discredit their claims and curse the adults to dance until they die. The kids lure the sisters to the high school and into a kiln where they are apparently burned to death. The sisters are resurrected and return home defeated, Winifred is unable to remember the ingredients to the potion and they fall into despair as it was earlier established that the candle only brought them back to life for that night, and unless they can use the potion on children by sunrise, they are dust and cease to exist. As Dani and Binx rest; Alison and Max, despite the warnings that nothing good can come from the book, open it to find a cure for his immortality. The book signals the sisters who use a corn broom, a mop and a Hoover vacuum cleaner to fly to its location. They secretly invade the house and grab the book, Binx and Dani before violently exploding from the house, but not before Winifred reveals the nature of the spell that brought them back to Alison. Sarah uses her power, a siren song to lure the children of Salem to their house.
Max and Allison give chase and Max manages to trick the sisters again using the headlights of his parents' car to simulate sunrise. In the confusion, he frees Dani and Binx and they return to the graveyard to hold out against the sisters. They encounter Billy and using a knife to sever the stitches on his lips, he apparently breaks the control Winnie has over him and joins the kids against them. They hold out well to start with, but Dani exits her protected grave plot when Winnie kicks off Billy's head and she uses this to her advantage, swooping down and taking Dani. Binx saves her by knocking the last vial of the life stealing potion out of Winnie's hand, which Max catches and drinks to take her place. Winnie drops Dani and picks up Max to drain his life force, but Alison, Dani and Billy cause a distraction using Sarah and Mary which gives Max the opportunity to knock both himself and Winifred to the ground as the other two fly up into the sky out of control. Winifred recovers and tries to steal Max's life force, but because she is standing on hallowed ground, she turns to stone. As the sun comes up, Mary and Sarah bid their goodbyes dramatically before exploding, followed shortly after by Winnie's statue exploding. They bid farewell to Billy, who returns to his grave, and Dani finds Binx, who had died after being thrown against the rock. The sisters are dead, the spell was broken and his soul was finally freed to move on. They meet Thackery's ghost and he bids farewell to Alison and Max, before kissing Dani on the cheek and leaving with his sister. As they walk out of sight, Thackery is apologizing to Emily for taking so long to find her, and they disappear into the afterlife together.
Meanwhile, Jay and Ice, who had been kidnapped and caged by the sisters, are singing Row, Row, Row Your Boat in their boredom. The eye of the book below them opens up and looks around, hinting that perhaps the sisters aren't completely gone after all. Shown as the credits roll, the adults and Max and Dani's parents are shown emerging from the Town Hall, covered in sweat and complimenting on how Salem knows how to throw a party, unaware they were uncontrollably dancing the night away.