The movie is about a girl named Frances Bacon McCausland (Erin Chambers). Strange things have been going on in the town of Middleberg. Dogs on people's roofs, alarm clocks going off three hours early, eggs all over the teacher's car, Jello in the swimming pool, and B's spray-painted all over town, including the lockers of the school—except for Frances' locker, which has a B inside it. All these weird pranks seem to point to Frances, but none of it makes sense to her.

The only person who can help her in this situation is a guy only she can see; Larry Houdini (Eric "Ty" Hodges II). Larry tells Frances that she's being framed by the Boogeyman, and he seems to know what's going on better than she does. Frances has a difficult time believing what Larry tells her, because (due to her having to cope with Darwin's, her little brother's, serious childhood illness) she's always tried to look at the world like an adult, using logic and facts to explain everything.

Over time, the Boogeyman's pranks become more insidious and incriminating. Frances ends up losing her friend Joanne and making an idiot of herself when she tries to convince others of Larry's existence. The two of them decide to put their heads together to get rid of the Boogeyman.

Then she learns that Larry was Darwin's imaginary friend. But, Frances told Darwin in the past that Larry wasn't real so Darwin doesn't believe in him anymore, so Larry starts to turn into a boogeyman himself which is the fate of all imaginary friends who get cut loose prematurely.

Finally, the Boogeyman performs such a crazy prank that the entire town is demanding answers from Frances and her family. Then Darwin gets kidnapped by the Boogeyman, and Larry and Frances must travel into the mysterious Boogeyworld under the bed to save him.

For a few minutes, Larry turns into a complete Boogeyman and almost throws Darwin over a cliff. But Frances convinces Darwin that Larry was real and Larry reverts back to his normal self. After using a special machine on the original boogeyman, Frances realizes that its her old imaginary friend, Zoe. Francis had turned her back on Zoe when her baby brother became sick and she had decided that imaginary friends and flights of fancy were childish and useless. She apologizes to the boogeyman and Zoe returns to her old imaginary self.

They all return to the real world and Larry and Zoe have to leave. Frances has become too old and they have to go to new children. Francis is distraught as it wasn't easy for her to believe in them again so, before Larry and Zoe leave, Larry kisses Frances as a way of showing her that childhood was great but, then, so is adulthood if she keeps a sense of wonder. Then they both go off to defeat a Boogyman in another town.