The book opens with an unnamed narrator's description of a party held one Christmas Eve in England at which some friends have gathered to share ghost stories. One of the partygoers, Douglas, says that he knows a particularly sinister ghost story about a governess's time spent taking care of a wealthy Londoner's niece and nephew at a country estate haunted by two ghosts.The story is that a governess goes to an English country house to take charge of two orphaned children, Miles and Flora. The governess is told she must manage everything herself and not disturb the children's uncle, who is their guardian. Soon the governess is alarmed when she sees an unknown man and woman around the estate, and the housekeeper informs her that the couple used to work there, but both died. The governess suspects that the children know more about these „ghosts" than they will admit to her, and fears for their safety.