Sherlock Holmes and Dr John Watson are asked to investigate mysterious hauntings that are taking place at a waxworks museum.
The owner of the museum, Mr Chamberlain, has received reports of objects moving on their own, eerie sounds echoing through the walls, and ghostly figures moving through the many corridors of the old building. As the rumours increase, and his visitor numbers fall as a result, Mr Chamberlain asks Holmes and Watson to find out what, or who is causing the disturbances. Holmes and Watson are soon on the case. Their initial investigations lead them to several suspects, all of whom have a reason for creating the strange goings-on. To Holmes' dismay, one of their suspects includes the famous medium, Madam Rosalind, who has crossed paths with them before. As true sceptics of all things paranormal, Holmes and Watson continue with their investigation, knowing that the hand behind the occurrences must be of an earthly nature, and not a spiritual one. But Madam Rosalind has other ideas and soon throws the investigation off course.