Los Angeles horror hostess Elvira, Mistress of the Dark, takes a bold stand and quits her job after facing sexual harassment from the new owner of her station. Aspiring to launch her show in Las Vegas, she finds herself in need of $50,000 to make her dream a reality. Upon discovering that she stands to inherit from her late great-aunt Morgana Talbot, Elvira travels to Fallwell, Massachusetts to claim her inheritance, which consists of an old mansion and Morgana's beloved poodle, Algonquin.
In her new surroundings, Elvira’s bold and revealing fashion sense clashes with the conservative values of the local town council, causing quite the stir. However, she finds an unexpected ally in Bob Redding, the local theater operator, who supports her amidst growing tensions. While the town's teenagers quickly embrace Elvira, their hard-nosed parents deem her a negative influence. Patty Kellermann, the owner of a nearby bowling alley, aims to win Bob's affection and seeks to undermine Elvira during her late-night gory film festival held at Bob's theater, leading to an embarrassing moment for Elvira.
As Elvira's desire to sell the mansion and head to Las Vegas grows, she remains oblivious to a lurking danger. Her uncle, Vincent Talbot, is not as harmless as he appears; a warlock with nefarious intentions, he is fixated on obtaining Morgana's spellbook and schemes to eliminate Elvira in his wicked quest for power, manipulating the town’s residents against her.
Attempting to impress Bob with a home-cooked meal, Elvira inadvertently uses the spellbook as a cookbook and summons a sinister creature that wreaks havoc. In a twist of fate, she discovers that the book belonged to her mother, Divana, and was hidden by Morgana to protect her from Vincent's malevolence. During a chaotic encounter at a Morality Club picnic, her failed spell results in an unintended aphrodisiac effect, causing the town's adults to scandalously remove each other's clothing, leading to their arrest for indecent exposure. Following a physical altercation with Patty that embarrassingly reveals her stuffing, the tension escalates.
Before long, Vincent incites the townspeople to charge Elvira with witchcraft, a still-punishable offense in the state, as they plot to burn her at the stake. The town's teenagers, eager to rescue her, clumsily find themselves locked in another cell. Meanwhile, Bob attempts to retrieve the spellbook but gets caught by Vincent, who possesses it. In an unexpected turn, Algonquin transforms into a mouse to free Bob.
As Elvira faces the flames, she brilliantly uses Morgana's ring to summon rain that extinguishes the fire. She escapes with Bob, but not before facing off against Vincent in a fierce magical showdown that culminates in the destruction of the mansion. Elvira triumphantly banishes Vincent to the underworld, though the house and much of the magical properties are lost in the conflagration.
The following day, as Elvira prepares to depart, the townspeople express their regrets and plead for her to stay. Despite sharing a kiss with Bob, she insists on leaving, as she has inherited Vincent's estate, which fortunately has enough funds for her Las Vegas show. The movie concludes with Elvira dazzling audiences at a hotel in Las Vegas with an extravagant musical number, proving that her spirit and ambitions can never be extinguished.
