The plot of Bhoot revolves around a married couple Vishal (Aay Devgan) and Swati (Urmila Matondkar). Vishal is a stock analyst while Swati is a homemaker. They move into a new high rise apartment in Mumbai. The flat was previously occupied by Manjeet and her little son. But Manjeet kills her son and commits suicide. The watchman of the building testifies that Mnajeet was suffering from depression and was suicidal. Vishal and Swati move into the same flat but Vishal abstains from sharing this unpleasant fact with Swati. When she learns about it from the maid (Seema Biswas) she feels uncomfortable and is disappointed with Vishal. However they resolve their differences.
Troubles appear in their paradise when Vishal finds out that Swati is sleepwalking. Often she even claims to have seen Manjeet in their house. Vishal is convinced that Swati is hallucinating. Manjeet's story has affected her so much that she is visualizing the dead lady. Vishal consults Dr. Rajan (Victor Banerjee), a psychiatrist. But the doctor is unable to cure her. Swati's condition worsens and she behaves like one who has been possessed. Initially Vishal does not pay attention to such suggestions. However Swati's bizarre behaviour scares him. It is their maid who truly believes that Swati is possessed by an evil spirit and she invites an exorcist, Sarita. This particular character has been played by Rekha.
Dr. Rajan is completely perplexed with Vishal's behaviour. He completely disagrees with the fact that an exorcist has been called while Swati's case could have been solved medically. Sarita is successful in her dialogue with Swati. The spirit that is residing in Swati's body claims to be Manjeet. But the ghost refuses to leave Swati's body or to divulge her secret. To speak more with the ghost Sarita decides that they need to know more about Manjeet. Vishal finds out that Manjeet's mother, Mrs. Khosla (Tanuja) is still alive and they go o meet her.
In the meantime the watchman of the building gets killed. He is murdered and to investigate the incident the police are called. Inspector Liaqat Quereshi is handed over the case. As he investigates the case he realises that all is not well in Vishal's household. Out of suspicion he keeps a strong vigil on Vishal and Swati. On the other hand Vishal goes to met Manjeet's mother and begs her to help his troubled wife. Mrs. Khosla agrees and goes to the apartment with him. As Manjeet sees Mrs. Khosla she softens but does not leave Swati's body. She has work to finish.
As Manjeet speaks to her mother it is revealed that Sanjay (Fardeen Khan) who resides in the same building was fascinated by Manjeet. One night he tried to force himself upon her. To save herself from disgrace she jumped from the balcony of her 12th floor apartment. Sanjay is petrified. He conspires with the watchman (Sabeer Masani) so that no one could catch him. In order to wipe out all evidence the watchman throws Manjeet's little son from the balcony too. When the police investigate the case he simply says that Manjeet committed suicide. Manjeet comes back as a 'bhoot' (spirit) to avenge her death as well as her innocent son's. The spirit admits that she killed the watchman through Swati. Now she wants to kill Sanjay.
Mrs. Khosla pleads with her daughter's spirit saying that her revenge would put an innocent woman into danger as Swati will be charged with suicide. Listening to her mother Manjeet leaves Swati's body. So she let the police do their work and take Sanjay to prison. She later possesses Sanjay and compels him to kill himself brutally. Bhoot ends with Swati cured and the guilty being punished.
Ram Gopal Verma was successful in building up the mood in Bhoot. The dim lit rooms, the mysterious characters, the incredible camera work and haunting background music have desired effect. Needles to say Bhoot presented some of the most outstanding performances by Urmila as the possessed woman. Her antics were sufficient to build up an eerie atmosphere. She played her role convincingly. After a long gap Rekha and Tanuja are seen on the silver screen. Rekha's mystifying persona and a perfect make up added to her performance in the role of an exorcist. It is a pleasure watching as Sarita. Ajay Devgan, Seema Biswas, Tanuja, Nana Patekar and Fardeen Khan put up wonderful acts as well.