[1] The film centers on Alex Grant who witnesses a carnival clown named Louis Seagram murdering her mother on January 24, 1977.

She runs in Oceanside bar with her younger sister, but things take a turn for the worse when she start having hallucinations of Seagram and evil, ghoulish figures.

Peter Soby was Director of Development at an independent production company, Shoreline Pictures, when a script came across his desk entitled, "Carnival Souls II" written by the star of the original film, Candace Hilligoss.

Peter then negotiated with Harvey and Clifford the rights to create a "based on" film which eventually became known as "Wes Craven Presents Carnival of Souls".

Craven agreed to grandfather the project as an executive producer and TriMark Pictures eventually paid him to put his name in the title of the film.