Jonathan Graves inherits his father's old mansion, situated away from the bustle of the city. Fascinated by the occult, Jonathan discovers ancient tomes and paraphernalia that once belonged to his father, who was deeply involved in black magic and summoning rituals. As he delves deeper into the dark arts, hoping to gain knowledge and power, he unwittingly begins to tread on a dangerous path, ignoring the warnings of his girlfriend Rebecca. In his obsession, Jonathan conducts a ritual that he believes will give him control over supernatural forces, but instead, he accidentally releases a group of small, demonic creatures known as Ghoulies.

The Ghoulies are mischievous and malevolent entities, each with its own grotesque appearance and malicious intent. They wreak havoc on the mansion and start to terrorize Jonathan, Rebecca, and their friends who visit the house. As the creatures spread chaos, it becomes increasingly clear that Jonathan has unleashed forces beyond his control. The group must cope with the consequences of tampering with the unknown, as the once majestic mansion becomes a playground for the sinister Ghoulies, who have their own plans and desires that don't align with Jonathan's initial intentions.