The film was directed, produced, written, and composed by Frank LaLoggia, a native of Rochester. It starred Lukas Haas, Len Cariou, Alex Rocco, and Katherine Helmond.
In a flashback, horror author Franklin "Frankie" Scarlatti recounts a story whilst traveling back to his hometown - Willowpoint Falls.
It's Halloween 1962, and Frankie (Lukas Haas) has been locked in the school's cloakroom after the last bell has rung for the day by the school bullies Donald (Jared Rushton) and Louie (Gregory Levinson). Trapped well after dark, he witnesses the ghostly scene of a brutal attack on a red-haired little girl. Suddenly in the present day, someone enters the cloakroom. They keenly survey the room then focus their attention on the air duct located in the floor. While they work to unscrew the vent cover, Frankie shuffles away from a brown rat and is discovered. He quickly pulls his Halloween mask over his face as the stranger walks toward him menacingly asking "Who are you?". Before Frankie can give a coherent answer, he is snatched off the ledge and choked. He loses consciousness and again sees the girl however, this time, she asks for his help to find her mother. Without warning, Frankie is revived by his father Angelo (Alex Rocco) and rushed to the hospital. The police arrest the black janitor, Harold "Willy" Williams (Henry Harris), believing him to be Frankie's attacker.
As Frankie recovers at home, Frankie's brother Geno (Jason Presson) brings him a newspaper article about the attack. As background to Frankie's attack, the newspaper reports the mysterious and unsolved deaths of eleven other children - all apparently at the hands of a child serial killer. By Geno's reaction, this is a well-known but suppressed series of crimes that the community is well aware of. Startled, Frankie recognizes the picture of the red-haired girl by the photo printed in the newspaper - Melissa Ann Montgomery (Joelle Jacobi), the very first victim. Melissa begins to haunt Frankie, and the two form a tenuous friendship. Striving to help her, he returns to the cloakroom to investigate. Remembering that his attacker began unscrewing the grating over the air vent prior to the attack, he removes the cover and finds several dust-laden objects: a few toys, a hair clip, and a high school class ring. Frankie pockets the hair clip and ring then leaves.
Later, Frankie overhears the chief of police talking to his father (also a policeman), who reveals that not only is the case against the janitor crumbling but that the cloakroom is also the scene of Melissa's murder. After considering this new information, Frankie confides in Phil (Len Cariou), a family friend, that the class ring likely belongs to the killer and that he thinks the killer returned to the cloakroom to retrieve it as the air system was due to be replaced soon. Phil asks to see the ring however, Frankie checks his pocket and doesn't have it. Unbeknownst to Frankie, the ring had accidentally fallen out of his pocket earlier in his bedroom. His brother Geno found the ring and thinking it might hold some value, tucked it away for safekeeping.
Later, Donald and Louie convince Frankie to go out with them to the nearby cliffs. They visit a cliff side cottage, and from his dreams Frankie realizes this is where Melissa lived. Entering a bedroom, Frankie surmises that it was Melissa's bedroom. He takes the hair clip (which he has been carrying with him all this time) and replaces it alongside its twin on Melissa's dresser. Minutes later, the boys encounter a ghostly lady dressed in white. They take off running and Frankie collides into Geno within the surrounding forest. Frankie tries to explain the link between Melissa, the attacker and the lady in white, but is unsuccessful.
One evening, Melissa appears to both Geno and Frankie. The town clock begins to chime and Frankie realizes that her death re-enactment is about to commence. The boys follow her ghost to the school then wait. Shortly thereafter, her lifeless body is seen descending the stairs as though carried by someone invisible. Geno and Frankie follow the body across the schoolyard and out into the forest. They then watch in horror as the body approaches the cliffs. At the last minute, she awakes and begins screaming for her mother. Her body is raised into the air and then thrown mercilessly over the edge. Her screams are abruptly cut off as the waves crash at the base of the cliff. Suddenly, a pale woman dressed in white with long streaming blonde hair steps out of the front door of the cottage calling Melissa's name. She calls desperately until she reaches the edge of the cliff and looks down. Upon seeing Melissa's lifeless body on the rocks below, she flings herself off the cliffs in agony. The ghostly scene ends and the shaken brothers head home. Finally, Frankie understands the source of Melissa's anguish. He vows to help her bring the killer to justice.
Willy finally has his hearing, and the grand jury fails to indict him due to insufficient evidence. Outside the courthouse, the distraught mother of one the murdered children approaches Willy to apologize. Previously, she'd angrily accused him of murdering her son. Seated in the squad car, Willy graciously accepts her apology as his wife looks on lovingly from the opposite window. The mother pulls out a small revolver and fires one shot through Willy's temple before anyone can react. Willy falls forward dead as his wife looks on in shock. Willy's wife then stands up, turns around and walks away as bedlam breaks out. Angelo rushes forward and grabs her by the shoulder only to discover that she's also been shot through the chest by the same bullet that killed her husband. As she's dragged away from the police car and disarmed, the distraught mother cries out the name of her long dead child.
Meanwhile, back at the Scarlatti residence, Geno begins to research the class ring he found in his bedroom. Using one of his father's old yearbooks and class ring, he realizes that his father and the killer are in the same class. Angelo's yearbook reveals that the initials on the ring, "MPT", belong to Michael P. Terragrossa. Geno quickly deduces that the "P" stands for Phillip — as in their family friend Phil — and he rushes to tell his father. Frankie happens to be with Phil at that very same moment - having bow/arrow target practice. Frankie absentmindly begins to hum Melissa's favorite tune: "Did You Ever See a Dream Walking?". Simultaneously, Phil whistles exactly the same tune as he gathers their equipment to load into the station wagon (which Frankie is sitting inside of). Startled, Frankie looks up as he makes the connection. He stares at Phil with an expression of horror mixed with shock. Phil realizes that Frankie has figured everything out and immediately attacks him. Frankie narrowly escapes and runs into the forest. He's easily disoriented as nightfall approaches and finds himself at the cliffs. Phil catches him and confesses to all of the murders. Half sobbing half screaming, he claims that if he had known it was Frankie in the cloakroom, he would not have attacked him. He then begins to strangle Frankie. Suddenly, Phil is struck from behind and they both collapse to the ground.
Regaining consciousness, Frankie finds himself lying on Melissa's bed within the cottage, illuminated by burning candles. Lying in her bed, he hears the piano being played by Amanda Harper (Katherine Helmond). Frankie learns that she was the one who saved him from Phil, and that she was the lady in white Frankie earlier saw when he was with Donald and Louie. Amanda reveals that she is Melissa's aunt and has been living in the cottage since the deaths of her sister and niece (her last living relatives). She also confesses that she attempted suicide due to misery, but was unsuccessful. She knows both her sister and niece's spirits are unsettled but hasn't found a way to unite them in the afterlife. Without warning, Phil attacks and kills Amanda, setting the building ablaze in the struggle.
After pummeling Amanda to death, Phil pulls Frankie from the burning cottage and attempts to throw him over the cliff. The Lady in White (Melissa's mother) suddenly appears and frightens Phil, causing him to tumble over the cliff's edge. Frankie is released unharmed. Melissa (presumably drawn to the site by Frankie) emerges from the burning cottage and the two ghosts happily reunite, ascending into the sky in a cascade of light. As Frankie crawls away from the ledge, Phil grabs his ankle. Angelo, Geno, and the police arrive and save Frankie. Angelo also tries to save Phil, but wracked with guilt and shame, Phil lets go and plummets to his death.
Everyone watches the cottage burn to the ground as the snow begins to fall.Lukas Haas as Franklin J. "Frankie" Scarlatti
Len Cariou as Michael Phillip "Phil" Terragrossa
Alex Rocco as Angelo J. Scarlatti
Katherine Helmond as Amanda Harper
Jason Presson as Geno Scarlatti
Renata Vanni as Mama Assunta
Angelo Bertolini as Papa Charlie
Joelle Jacobi as Melissa Anne Montgomery
Jared Rushton as Donald
Gregory Levinson as Louie
Karen Powell as Anne Montgomery (Melissa's mother/"Lady in White")
The film had a budget of 4.7 million and only grossed around 1.7 million.
The film has had a mostly positive critical response focusing on the stylish small town vibe and suspense without gore. Writing in the Chicago Sun-Times, Roger Ebert stated: "Lady in White, like most good films, depends more on style and tone than it does on story, and after awhile [sic] it's the whole insidious atmosphere of the film that begins to envelop us." New York Times critic Caryn James mostly praised the film, but pointed out that: "the heavy-handed subplot about 60's racism loads the film with more social weight than it can carry. And most damaging, we guess who the murderer is very near the film's beginning." Lady in White maintains a 67% "Fresh" rating on Rotten Tomatoes.
Lukas Haas and Katherine Helmond were both nominated for a Saturn Award in 1990, Haas was also nominated for and won a Young Artist Award. The film itself received nominations for a Young Artist Award and a Fantasporto.
The film was first introduced to the home video market on VHS by Virgin Visi and later by Anchor Bay on October 15, 1993. It was also released on laserdisc. Elite Entertainment released a Director's Cut with an extended 4 minutes on March 25, 1998. It was reissued on DVD by MGM on September 20, 2005 and featured 36 minutes worth of deleted footage and commentary from director Frank LaLoggia.