After being jailed for solving another mystery, the Mystery Inc. gang stumbles upon another mystery: a gruesome monster lurking underneath the town and cocooning everyone who comes near in green goop.

The children of Crystal Cove are being turned into monsters by a creature named Que Horrifico, scaring all of the adults in town. As a result, they abandon their children and run for their lives.

Fred becomes the target of a high school crush when new girl Alice May falls for him. However, Alice May is actually a ghost with a reputation for taking guys with her and making them disappear forever.

A monster called the Fright Hound starts attacking Crystal Cove and people believe Scooby-Doo is behind it. Could Scooby be the one attacking the city or is someone setting him up?

The gang and original Mystery Incorporated stand before the Evil Entity. The Entity grabs Scooby-Doo, and mentions that he must die and be reborn as a vessel to its darkness. Scooby breaks free, but Pericles volunteers to be possessed by the being, to which the Entity agrees. Professor Pericles believes he has gained ultimate power (due to his growth in size and appearance), but the Evil Entity kills Pericles and mutates his body into a squid-like monster. The Entity then assumes control of the Kriegstaffelbots and summons other evil Anunnaki, who proceed to offer the townspeople for the Entity to consume. When Scooby destroys the sarcophagus, the Entity is killed and a vortex sucks everything in, except for the gang, then explodes. The gang find themselves in a new version of Crystal Cove and Earth itself. After some strange encounters, Mystery Incorporated realizes that all the evil ever caused by the Entity has come undone, thereby changing history.