Following his discovery of the body of his wife Alison (Amy Irving) in a bathtub after her apparent suicide, Dr. David Callaway (Robert De Niro), a psychologist, decides to move with his 9-year-old daughter Emily (Dakota Fanning) to upstate New York. There, Emily makes an imaginary friend she calls "Charlie". Her friendship with Charlie begins to disturb David when he discovers their cat dead in the bathtub, who Emily claims was a victim of "Charlie". David has nightmares of the New Year's Eve party that occurred the night before Alison's death.