When a little Martian boy playing hooky crashes his "borrowed" saucer into the house, Casper shows him around, but the Martians are convinced that the saucer was stolen by humans and declare war on the Earth.
After the Trio's racket drives Casper from his bed, the friendly ghost encounters a Bear with insomnia. He enlists the help of the Sandman, but the bear seems incurable.
The Trio see Casper reading a book about insects and decide if they could become tiny, they could spook all the insects in the Enchanted Forest. Fatso tricks Casper into getting them some magic reducing pills from the witches.
Casper's lookalike - but big and muscular - cousin Powerhouse drops by for a visit, and they team up to scare the Ghostly Trio into ending their bullying ways.
Casper meets Robbie, a "misfit robot", who's been kicked out of the robot factory for being chronically absent-minded. The ghost helps Robbie to make some new friends in the forest.
The evil Eastern magician Ali Booboo feeds an ensorcelled apple to Nightmare, turning her into his slave. Casper and Wendy must pursue Booboo to his castle in the clouds to rescue their friend.
Casper visits King Arthur's castle and scares the knights out of their armor. He tries to help a cowardly knight get courage, thus assisting him in saving the princess from an evil dragon.
