After 16-year-old Alice Palmer drowns at a local dam, her family experiences a series of strange, inexplicable events centered in and around their home. Unsettled, the Palmers seek the help of a psychic and parapsychologist, who discovers that Alice led a secret, double life. At Lake Mungo, Alice's secret past emerges.
Wealthy Peter Sterling and his younger wife Christine have an existence of little excitement so when a stranger comes into their lives, she is intrigued. An affair turns into much more and they are soon plotting to rob Peter of a precious gemstone.