When the American Otis family moves into Canterville Chase, they find a blood stain on the library floor. It is a matter of interest because the housekeeper says it can't be removed. She explains that it is the blood of Lady Canterville, who was murdered by her husband on that spot in 1575.

The Otis family thinks this is nonsense. The eldest son, Washington, scrubs the stain away with Pinkerton's Champion Stain Remover. However, the next day the stain reappears. They scrub it out, and it again reappears in the morning, even after they lock the door to the library. At this point they are perplexed and concerned.

The family was warned when they rented the hall that it was haunted by a ghost. They had dismissed that idea as ridiculous because, being pragmatic Americans, they didn't believe in ghosts. Now they are beginning to believe that the ghost might be real.

In fact, Mr. Otis does encounter the ghost, but he is not afraid of it and neither is the rest of the family. They also become amused that the stain on the library floor changes color, ending up finally to be emerald green.

Ultimately, the ghost becomes the frightened and distressed one, not the family.