The Haunted Mansion was originally owned by a rich millionaire, but when his daughter Frederika died from a disease ten years ago, the family moved out due to grief. It later became an execution ground and now serves as a graveyard in present day. The graveyard site is used by the necromancer Chrome Artiste, who was controlling the souls of the dead in the form of zombies in order to perform cruel experiments.
The Fake Hero sees a small girl (Chrome) eying him from the upper floor. Luka enters the manor and encounters a Ghost Girl. He seals the ghost monster, but Alice is nowhere to be found; he then heads up the stairs to the upper floor while being attacked by a Cursed Doll.
In the next room, Luka encounters a scared Alice, slithering around the room as she knocks over a picture of a refined human woman (who was mentioned in one of the rumours). A Zombie Girl enters and is punched away by Alice. However, Alice's constant slithering and pounding causes the floor beneath her to break. Then another Zombie Girl appears, followed by three more. After Luka defeats all four, Chrome shows up, shocked at the turn of events.
Luka chases Chrome back to the foyer. The necromancer she introduces herself and her ultimate creation: Frederika, who was the human woman in the picture, and Luka concludes that all the rumours told in San Ilia are true. Chrome orders Frederika to attack Luka. During the fight, Frederika’s soul begs Luka to destroy her body, which he soon accomplishes.
However, the battle causes the floor to give in and the two are left in a small crypt where Chrome battles Luka. The fake hero eventually triumphs, and the necromancer flees. Luka gives chase and encounters Alice praying to escape the ghostly hellhole. After Luka tells her what happened, Alice pops open a coffin containing Chrome and slaps her for frightening her. Chrome agrees to stop her ways and is released. Afterwards, all the spirits whose bodies were used by Chrome appear and thank Luka, also causing Alice to faint.
As Luka drags Alice as he leaves the Haunted Manor, a strange woman wearing a labcoat appears to deliver supplies to Chrome. She sees that Chrome is defeated and leaves.
The ghosts from the Haunted Mansion later move to San Ilia, considering it a haven for them.