Stefano (Lino Capolicchio) arrives in a village of the Valli di Comacchio area where he has been employed to restore a fresco depicting what appears to be the martyrdom of Saint Sebastian, which has been painted on a rotting wall of the local church by a mysterious, long-dead artist named Legnani.

As Stefano is discouraged for his task throughout the town, some of the villagers are brutally killed – including his employer – and he comes to suspect that their murderer is trying to deter him from discovering the full truth behind the artist and his ominous legacy within the sleepy community.

The idea for The House With Laughing Windows came from a story director Pupi Avati had heard as a child involving the exhumation of a priest in the village of Sasso Marconi.

[3] Avati began working on the script again after the financial failure of his film House of Pleasure for Women and made several changes to the character and story.

AllMovie's review of the film was favorable, giving it a rating of 3 out of 5, and writing that "[though] fans of typical Italian horror films may find House with the Windows That Laugh [sic] lacking in the stylistic excesses of many of its contemporary companion pieces, it exceeds its contemporaries in almost every other area," and that it was "imbued with an overwhelming sense of dread that grows to an almost unbearable pitch.