Marnie Piper Kimberly J. Brown has just spent two years living with her grandmother Aggie Debbie Reynolds Cromwell. During a mortal neighborhood Halloween party at their home, Marnie tries to catch the eye of a cute new boy, Kal Daniel Kountz, by showing him Aggie’s magically hidden room, where a spellbook sits waiting. Soon, Aggie Debbie Reynolds notices troubling magical symptoms. The pair heads for Halloweentown to investigate and to fix the problem before the portal between Halloweentown and the mortal world—which only opens on Halloween—closes at midnight.
There, they discover the entire town has been drained of color and turned into a black‑and‑white, monotonous school of existence, a condition Aggie diagnoses as the “Grey Spell.” The victims include Marnie’s goblin friend Luke Phillip Van Dyke. Aggie contacts her grandson Dylan Joey Zimmerman back home for a spell from her book, but Dylan and Sophie Emily Roeske realize the book is missing.
As they dig deeper, they learn that Kal Daniel Kountz is a warlock—the son of their old foe Kalabar Robin Thomas—and that he stole Aggie’s spell book to hinder her, aiming to finish his father’s revenge on both Halloweentown and the mortal world. Aggie searches for a spare copy at her own house in Halloweentown, but it’s nowhere to be found, leaving the two of them anxious and pressed for time. In a tense moment, Marnie accidentally reverts Luke back to his goblin form, a reversal they cannot yet explain, hoping it’s only temporary.
Their quest leads them to the lair of Gort Blu Mankuma, the universe’s infamous junk magnet who hoards lost items from both realms. Gort, who has been discolored by the Grey Spell, has sold most of his inventory and traps the trio inside his cluttered, colorless house. Aggie Debbie Reynolds also loses her color, and the group rummages through a pile of missing socks and forgotten junk as they search for answers. In a bold turn, Marnie uses time travel to return to just before the Grey Spell struck Gort’s place. There, they uncover that Gort had sold the spare spell book to Kalabar about fifty years earlier. By replaying a moment from the past and recalling what Marnie had said—especially around Luke’s return to normal—the group discovers that the Grey Spell can be reversed by uttering “Trapa,” which is “Apart” spelled backward.
Kal [Daniel Kountz] continues to wage his magic, turning Halloweentown into a monochrome caricature of the mortal world and plotting to cast the same spell over the mortal realm, transforming people into the very monsters they are dressed as. In another twist, Sophie and Dylan realize that Alex [Peter Wingfield], long believed to be Kal’s father, is actually a golem built to distract their mother Gwen [Judith Hoag] at a high‑school Halloween party. Kal releases his spell at the party, whipping the guests into the forms of their costumes and plunging both worlds into chaos. Dylan and Sophie narrowly hide from the monster‑human chaos—even their own mother.
Marnie finally frees Aggie, but they arrive too late—the portal to the mortal world has closed, trapping them in Halloweentown. Instead of giving up, Marnie calls her siblings, and together they craft a new spell that forces the portal between Halloweentown and the mortal world to reopen permanently. Kal confronts Marnie, but she stands her ground and demands the spell book. Kal summons slimy, living-serpent vines of dark magic to seize both spell books in a bid to prove his superiority, but Marnie swiftly takes them back. In the end, Kal is banished by the vines, and the Cromwell family dismantles Kal’s hold on both realms, breaking the monochrome spell and restoring color and hope to their world.