"Spirit" is the epic story of the Buchanan family beginning in 1940's Connecticut. The real focus of the story is on Elizabeth and Laura Buchanan and their little sister Peggy. When we meet the family the three sisters are very young, spending their days lost in worlds of childish imagination. The sisters' favorite story is Hans Christian Andersen's "The Snow Queen," and the three occasionally act out parts of the tale for their own amusement, especially young Peggy. But then tragedy strikes when Peggy accidentally falls through ice and drowns in the family swimming pool. Her death causes the Buchanan family to slowly disintegrate, leading to premature aging for the father and a nervous breakdown with intermittent stays in a mental facility for the mother. Elizabeth and Laura grow up and try to do the best they can with their lives, but the death of Peggy casts a permanent shadow over everyone's life. For most people who lose a member of the family, life does go on after such a sad incident, but not for the Buchanans.

The problem comes when Elizabeth and Laura realize that Peggy hasn't gone gently into the good night. She returns as a spirit, a pale white shade dedicated to protecting her sisters from even the slightest dangers in life. When Laura has an improper relationship with the local preacher, Peggy is there to help clean up the mess in a particularly gruesome way. For over a decade, Peggy always shows up to deliver death, usually by using extreme cold as a weapon, to those who pose a threat to her sisters. It gets to the point where the two sisters feel they cannot even have a disagreement with another person without putting someone in harm's way. Then Elizabeth and Laura discover why Peggy acts in such an egregious manner. Peggy's actions in life, namely her imagination, have led to her return after death. After Elizabeth lives through an encounter with a terrifying creature invoked by Peggy, she knows she has to do something to get rid of her dead sister's influence.