The story centers on a young solicitor, Arthur Kipps, who is summoned to Crythin Gifford, a small market town on the east coast of the United Kingdom to attend to the funeral of Mrs. Alice Drablow, an elderly and reclusive widow who lived alone in the desolate and secluded Eel Marsh House.
The house is situated on Nine Lives Causeway, and at high tide is completely cut off from the mainland with only the surrounding marshes and sea frets for company. Kipps soon realises there is more to Alice Drablow than he originally thought. At the funeral he spots a woman dressed in black and with a pale, wasted face, who is watched in silence by a group of children. Over the course of several days, while sorting through Mrs Drablow's papers at Eel Marsh House, he endures an increasingly terrifying sequence of unexplained noises, chilling events and hauntings by the Woman in Black. The hauntings included the sound of a horse and cart in difficulty which were closely followed by the screams of a young child and his maid.
Most of the people in Crythin Gifford are extremely reluctant to reveal information about Mrs Drablow and the mysterious Woman in Black, and most attempts to find out the truth cause pained and fearful reactions. From various sources, Kipps learns that Mrs Drablow's sister, Jennet Humfrye, gave birth to a child, but, because she was not married when she became pregnant was forced to give the child to her sister. Mrs Drablow and her husband adopted the boy, called Nathaniel, insisting he should never know that Jennet was his mother. The child's screams heard by Kipps were those of Nathaniel.
Jennet went away for a year but after realising she could not be parted for so long from her son, made an agreement to stay at Eel Marsh House with her son, so long as she never revealed her true identity to him. One day, a pony and trap carrying the boy across the causeway became lost and sank into the marshes, killing all aboard, while Jennet looked on from the window of Eel Marsh House as she waited for them. This was particularly distressing for Jennet Humfrye as she had planned to run away with her son, as they were becoming very close.
Jennet died later, but returned to haunt Eel Marsh House and Crythin Gifford with a vengeful malevolence, as the Woman in Black. According to local tales, seeing the Woman in Black meant that the death of a child would follow.
After the affair is settled, Arthur Kipps returns to London, marries a woman named Stella, and has a child of his own. At a fair, while his wife and child are enjoying a carriage ride, Kipps suddenly sees the Woman in Black once more. She steps out in front of the horse pulling the carriage and startles it so greatly that it gallops away and collides with a tree, killing the child and fatally injuring Stella, who dies of her injuries ten months later. The Woman in Black has had her vengeance.