Fred, Daphne, Velma, Shaggy, and Scooby-Doo find themselves at the grand opening of the Coolsonian Criminology Museum, excited to see an exhibit showcasing monster costumes from their past adventures as Mystery Inc. However, their festivities take a dark turn when the Evil Masked Figure crashes the event, threatening destruction upon the gang while stealing several prized costumes with the help of the reanimated Pterodactyl Ghost.
In the aftermath, a smear campaign led by journalist Heather Jasper-Howe emerges against the gang. Determined to prove themselves, Shaggy and Scooby pledge to stop making mistakes and attempt to solve the mystery independently. They suspect that a former adversary could be at play. Initially dismissing the notorious Pterodactyl Ghost, they focus their attention on Jeremiah Wickles, the former Black Knight Ghost, who is notably the cellmate of the deceased Jonathan Jacobo.
The gang journeys to Wickles' mansion, where they discover a grimoire that belonged to Jacobo, revealing secrets about crafting monsters. Driven by curiosity, Shaggy and Scooby find an invitation to the Faux Ghost, a nightclub frequented by unmasked criminals. After being attacked by the Black Knight Ghost, they narrowly escape, but decide to infiltrate the Faux Ghost disguised to gather intel on Wickles. Unfortunately, their cover is blown, leading to their expulsion from the premises. Meanwhile, Velma identifies a crucial component in the grimoire called "randominium," which can be found in the old silver mines.
As the trio of Fred, Daphne, and Velma, along with the museum curator Patrick Wisely, head to the museum, they are dismayed to find that the entire exhibit has vanished. The confrontation with Wickles at the mines reveals his plan to transform the location into an amusement park; with this realization, they conclude he’s not their villain. The gang eventually locates the Monster Hive, where a machine is transforming their beloved costumes into actual monsters. In a playful yet reckless moment, Shaggy and Scooby tamper with the machine’s controls, inadvertently creating more chaos by bringing more monsters to life, prompting a frantic escape from the 10,000 Volt Ghost.
As the Evil Masked Figure wreaks havoc throughout Coolsville, the gang despondently retreats to their old school clubhouse. Here, they figure out that they can reverse the machine's effect by adjusting the control panel's wiring. Their plans are disrupted when Captain Cutler emerges from the depths, leading them back to the mines to restore the panel’s functionality and counteract the Monster Hive's effects. Each member of the gang splits off to lure away the rampaging monsters, but ultimately leaves Shaggy and Scooby to return the control panel to the Hive.
Amidst the action, Velma discovers a shrine for Jacobo built by Patrick, which raises her suspicions about his true identity. However, her fears are quickly assuaged when he saves her from a precarious situation. The climax unfolds as the gang confronts the Evil Masked Figure within the Hive but are quickly overpowered by the Tar Monster, leaving only Scooby free to act. Demonstrating great bravery, he manages to subdue the Tar Monster with a fire extinguisher and resets the control panel, defeating the monstrous foes.
In a shocking twist, the gang reveals that the Evil Masked Figure is actually Heather. However, in a further revelation, they discover she is a disguise for Jacobo, who faked his death to exact revenge. After successfully capturing Jacobo and his accomplice Ned, the gang is hailed as heroes in Coolsville once again, culminating in a joyous celebration at the Faux Ghost, accompanied by guest star Ruben Studdard.
