In a Manhattan radio studio, a broadcast is being made by crime reporter Lawrence Lawrence (Bob Hope)—"Larry" to his friends, as well as his enemies, who are many in number among the local underworld.
Listening in on the broadcast is pretty brunette Mary Carter (Paulette Goddard), whose high-rise hotel room goes dark as a violent thunderstorm causes a citywide blackout. In the near darkness, a knock comes at her door. It is Mr. Parada (Paul Lukas), a suave, vaguely sinister Cuban solicitor. He delivers the deed to her inherited plantation and mansion, "Castillo Maldito," on a small island off the coast of Cuba. Despite Parada's discouragement, she impulsively decides to travel to Cuba by ship to inspect her new property.
During Parada's visit, Mary receives a telephone call from Mr. Mederos (Anthony Quinn), an even more sinister gent who warns Mary not to sell the newly inherited property to Parada. Mary agrees to meet Mederos later.
Meanwhile, after Larry Lawrence has finished broadcasting the evening's exposé of a local crime boss, he receives a telephone call from the crime boss, Frenchy Duval (Paul Fix). Frenchy invites Larry to his hotel to discuss the broadcast so he can "give it" to him straight.
Coincidentally, Frenchy is living in the same hotel where Mary Carter lives. Mederos arrives on the same hotel floor as Larry. However, Mederos is looking for Parada. Mederos confronts Parada and Parada shoots and kills him. Larry hears the shot and fires his gun at random. In a mix-up in the still-darkened building, Larry sees the body and believes he's killed one of Duval's henchmen. In the confusion he finds himself in the rooms of Mary Carter, who is already busy packing for her journey. Believing that he is being pursued by Duval's men, Larry hides in Mary's large open trunk. Unaware of Larry's presence, Mary locks the trunk and arranges for its transport to the harbor.
Later at the dock, Larry's valet Alex (Willie Best) searches among the luggage bound for loading and finds Larry among them. Although not in time to prevent the trunk's transfer to the ship's hold, Alex manages to get on board, hoping to extricate his employer before the ship sails.
Once in her stateroom, Mary is surprised to unpack Larry along with the rest of her belongings. Larry and Alex decide to remain on board, partly to act as bodyguards to the plucky beauty, but also to keep out of reach of Frenchy Duval and the police.
As Larry and Mary strike up a flirtation, they run into an acquaintance of Mary's, Geoff Montgomery (Richard Carlson), a young professorial type who regales them with tales of the local superstitions of their destination, particularly voodoo, ghosts and zombies.
Upon reaching port in Havana, Mary, Larry, Alex go to the island. En route they find a shack occupied by an old woman (Virginia Brissac) and her catatonic son (Noble Johnson), whom they believe is a zombie. The imposing plantation manor proves to be a spooky edifice indeed. They begin to explore the long-abandoned, cobweb-ridden mansion, and discover a large portrait of a woman who is nearly an exact likeness of Mary—most certainly an ancestor.
Soon they are terrorized by the appearance of a ghost, and the reappearance of the zombie. Are these real, or are they a ruse to frighten Mary away from her inheritance?
There is at least one error in the script. In the scene where the real ghost, that of Don Santiago, appears, he emerges from a large chest after the lid inexplicably rises. He then walks, before returning to the chest, the lid of which then closes again. Larry then runs to the chest and lifts the lid, to reveal a skeleton lying there.
Later, however, when Larry and Alex are elsewhere in the castle, among the bodies in the glass cases, one of the bodies is identified as the same Don Santiago, “the gentleman we met in the hall”.
The ghost is therefore the owner of two skeletons.
The Dickey and Goddard play The Ghost Breaker was filmed twice previously by Paramount, first in 1914 by Cecil B. DeMille, with stars H. B. Warner and Rita Stanwood. It was filmed again in 1922 by director Alfred E. Green, starring Wallace Reid and Lila Lee. Both these silent film versions are now considered to be lost films.
George Marshall, director of the 1940 version, remade The Ghost Breakers as Scared Stiff (1953), featuring Martin and Lewis (Dean Martin and Jerry Lewis). The remake featured cameos not only from Hope, but also from Bing Crosby. A year before Scared Stiff, Martin and Lewis appeared in the Crosby/Hope film Road to Bali.
(Marshall also directed the not-dissimilar Murder, He Says (1945), in which Fred MacMurray compares the situation to "that Bob Hope movie The Ghost Breakers.")
The film was adapted for radio on Screen Directors Playhouse on April 4, 1949. Bob Hope re-created his film role, and Shirley Mitchell starred as Mary. Hope appeared again on the program for an hour-long version on June 14, 1951.
Reviews from critics were positive. Bosley Crowther of The New York Times wrote, "It looks as though Paramount has really discovered something: it has found the fabled formula for making an audience shriek with laughter and fright at one and (as the barkers say) the simultaneous time." Variety declared it "solid comedy entertainment that will generate plenty of laughs and roll up some hefty b.o. figures along the way." Harrison's Reports called it, "One of the finest ghost stories that have been produced for some time." "Corking comedy has laughs and thrills aplenty," Film Daily reported. John Mosher of The New Yorker wrote, "The amalgam of farce and horror is very successful."
Writing in The Zombie Movie Encyclopedia, Peter Dendle said, "This is considered to be among Bob Hope's finest pictures, and the direction is smooth and the lines delivered flawlessly, but black actor Willie Best's jokes about fried chicken are no longer funny, and smarmy Hope isn't funny to begin with." Glenn Kay, who wrote Zombie Movies: The Ultimate Guide, called it "entertaining and hugely successful", though he said some scenes are uncomfortable due to their political incorrectness.
The Ghostbusters series of film, though not a product of Dickey or Goddard, continue on in the same spirit as their 'Ghost Breaker' predecessors.