The ghost Arang meets Eun-oh, who can see and hear ghosts. She arranges for him to become magistrate so he will help her discover her real name and how she died. Eun-oh is only interested in finding his mother. Reapers arrive to take Arang. She is rescued by Eun-oh after he sees she is wearing his mother's hairpin.
Death tries to take Arang's life, but Eun Oh saves her. Afterwards, a family heirloom catches his attention. Eun Oh soon becomes the town Magistrate, and he decides to help Arang recover from her amnesia. The new Magistrate's investigation leads Arang to a man whom she once called her fiancé.
Eun Oh gives Arang an expensive gift to accommodate her meeting with Lord Choi's son. Ghosts appear and attacks the young girl, requiring Eun Oh to save her. The battle interrupts Arang's meeting. Meanwhile, some villagers find Arang's dead body in a river, and she vows to meet Jade Emperor to get some answers.
After meeting Jade Emperor, Arang gets an opportunity to return to human form so that she can find her murderer. The catch is that she will only have three months to do so. If she fails, she will spend an eternity in hell. Meanwhile, Eun Oh buries Arang's body, and Lord Choi's son gets a strange surprise at the funeral.
Eun Oh finds his mother's hairpin among Arang's belongings. The two friends decide to look for Eun Oh's missing mother and Arang's murderer together. Later, Lord Choi's son stabs Arang while she is sleeping, and he takes her body to a mountain river, following Eun Oh's mother's instructions. Arang must now escape from the both of them.
Eun Oh believes that Arang's memory will return if she visits a cabin at the Tomb of Bones. She heads to the cabin but only receives a glimpse of her stealing Eun Oh mother's hairpin while she was sleeping. Meanwhile, Joo Wal receives a death warrant from a strange source to kill Eun Oh.
Eun Oh falls off cliff while trying to break that last seal in the Tomb of the Bones. Arang tries to save him, but they end up falling together. Later, the two explorers encounter a deadly ghost in a cave. Another ghost saves them, and Eun Oh discovers that he released their savior and new friend right before falling off the cliff.
Arang asks Eun Oh to use his ability to contact a friendly ghost to lead them to the Tomb of Bones. Eun Oh refuses but later changes his mind after finding evidence that his mother could be on the mountain. Afterwards, Ju Wal leads Arang to a shrine that could be where Eun Oh's mother is hiding out, and Lord Choi orders his goons to destroy the Tomb of Bones.
Lord Choi wants to know why Eun Oh has hidden the fact that he found the Tomb of the Bones. Soon after, the distraught Choi begins to defame his protégé in an attempt to discredit Eun Oh's respect as a Magistrate. The dark Lord then sends his entourage to attack Arang and Eun Oh, but they escape. Afterwards, the pair follows two men who have kidnapped a friendly ghost.
Eun Oh aks Lord Choi to release a slave wrongly imprisoned. Choi complies but gives instructions to the slave before he leaves. Meanwhile, Arang and Joo Wal go on a shopping spree where they encounter Eun Oh. The pair then takes a romantic horseback ride when Arang tells her best friend a dark secret.
A deadly ghost interrogates Eun Oh, wanting to know how and where the magistrate got his mother's magic hairpin. Arang soon arrives, and the ghost disappears before getting an answer. Meanwhile, Lord Choi sends his goons to kidnap Arang where she is mortally wounded in the process. The question now is whether Eun Oh's magic kiss can save her life.
Eun Oh discovers that Lord Choi possesses the same magic heirloom that he found in the Tomb of the Bones. He sends some friendly ghosts to spy on his enemy, but they can't seem to get past the front door of Lord Choi's house. Meanwhile, Moo Yeon orders Oh to arrest his best friend, and Joo Wal's feelings for Arang prevent him from accomplishing his secret mission.
A witch doctor advises Eun Oh and Arang that their magic hairpin separates the real world from the spirit world. Afterwards, the pair heads to Lord Choi's home to steal a replica of the talisman. After entering a secret passage, Eun Oh finds an ancient relic, while outside the home, Joo Wal presents Moo Yeon to Arang.
Eun Oh finally tells Arang that he loves her, and Moo Yeon discovers that one of his ancient relics is missing. When a witch doctor opens the stolen item, a deadly spirit attacks Arang and tries to take over her body. Eun Oh destroys the spirit with his hairpin, and Moo Young discloses the reason why everyone is trying to kill Arang.
Eun Oh finds his missing mother in a temple and stops Moo Young from killing his sister. The confused magistrate confronts Lord Choi and demands that the lord explain why his mother is evil. Afterwards, Eun Oh refuses to believe that his mother is a malicious immortal, and he tries to exorcize the monster within her.
Arang and Eun-oh find a connection between his mother and Arang's death. The maid's body is discovered. Mu-yeon admits to erasing Joo-wal's memory after Seo-rim's death. Eun-oh has a warm reunion with his father. Arang remembers the night she died as Mu-yeon reaches for her.
Eun-oh is devastated to learn his mother is responsible for Arang's murder. Eun-oh discovers a hidden weapons cache. Arang gets advice from her friend's deceased grandmother. Mu-yeon orders Joo-wal to kill Eun-oh and bring her Arang. Eun-oh and Arang share a kiss. Arang asks to be taken to Mu-yeon.
Eun-oh is arrested for abusing his power by Governor Park. He pleads guilty to the false crimes after Lord Choi threatens Arang. Lord Kim arrives with a royal pardon for his son. Lord Choi is arrested instead. Eun-oh races to stop Arang from sacrificing herself.
Arang is saved from Mu-yeon. Eun-oh is devastated to learn his mother can not be saved. Eun-oh's mother gains control long enough to apologize for being a bad mother. Lord Choi is struck dead by his servant. Eun-oh stabs his mother in the heart with a hairpin, forcing Mu-yeon out.
Mu-young stabs Mu-yeon and then himself with the Emperor's dagger ending their existence. Overwhelmed by his memories, Joo-wal commits suicide and becomes a reaper. Eun-oh takes Arang's place in hell. Mu-young is reincarnated as a goat. Eun-oh and Arang are reunited after being reincarnated.