Greg, Michael, Bird, and Shari are best friends stuck living in a small town like all of Stine's characters. They decide to break, er, sneak into an old haunted house called the Coffman house. Not only is it haunted, but there's also an older guy in town who freaks everyone out called Spidey who supposedly lives there too. Oddly enough, they literally say the house is abandoned and sat empty for years before saying on another page that Spidey lives there.
After hanging around for a bit, they find his room in the basement and like horrible little kids, they go through all his stuff and even put on his clothes. Greg finds a camera that he uses to take a picture of Michael right before Michael falls off a ledge or something and hurts himself. They then hear someone upstairs and manage to get out of the house right before finding that the picture he took shows Michael on the ground with an injured leg, just like what just happened.
Greg goes home and takes a picture of his dad's brand new car, a hot little number called a Mercury station wagon. The picture shows the car with a smashed front end. When his dad takes them for a ride, with his mom marveling about the cup holder that pulls right out from the dashboard, his dad takes his eyes off the road and almost hits someone. Greg later takes a picture of his older brother Terry that shows the guy outside with a fearful look in his eyes.
Cut to the next day when the kids all get together to either play or watch a baseball game at the park. After taking a picture of Bird on the field, the photo develops and shows him unconscious on the ground. He tells Shari about all the strange pictures, which leads to her looking over the camera and realizing that (a) it has no manufacturer mark and (b) there's no place to put film in it. They hear someone scream and find Bird laying unconscious on the ground, just like in the picture. Though it turns out he was making fun of them, he then gets hit by a baseball and really does pass out.
By the time Bird wakes up, Terry comes running up with the same long on his face as in the photograph. He tells Greg that their dad was in a car accident. He's now in the hospital and the car is totaled. Their dad is okay but the car is definitely not.
While most of us would try to get rid of this camera, Shari makes Greg bring it to her birthday party. After playing truth or dare, she convinces him to take her picture. When the image shows everything but her, she makes him take another, which shows the same exact thing. Not long after, Shari disappears. Though Greg tries to tell the cops who show up about the camera, they think he's in shock and send him home.
After spending two whole chapters worrying about what to do, Greg gets frustrated and tears up the pictures he took at her birthday party. As soon as that happens, Shari suddenly reappears without any memories of what happened. She and Greg talk it over and decide that they must put the camera back in the house.
While trying to sneak back in, they get caught by Spidey. He reveals that he was actually a scientist years ago who worked to develop the camera. His partner came up with the idea, but Spidey stole it and went on the run. The partner dabbled in the Dark Arts and put a curse on the camera. They struggle, Shari takes a picture of him, and Spidey winds up dead. The last picture taken shows him with a frightened look on his face.
At the very end, the four friends get together and talk about what happened. Shari and Greg lied to the police, telling them that they ran into the house to avoid a storm and found his body there. The book then cuts to two guys who saw them sneak into the house and saw the camera. They then went in and stole it. The last scene surrounds them laughing as they wait to see the picture they took develop...