Cardiff, December 24, 1869. At the Sneed and Company undertakers, a private viewing of the body of Mrs. Peace (Jennifer Hill), grandmother of a man named Redpath (Huw Rhys), goes awry when Peace's body is suddenly reanimated, glowing with ghostly light, killing Redpath and heading out into the darkness.

Having shown Rose (Billie Piper) the far future, the Doctor (Christopher Eccleston) now takes her back into the past, heading for Naples in 1860 on a whim. The TARDIS arrives in Cardiff on Christmas Eve, 1869, instead, and the Doctor gives Rose instructions on how to dress in period costume. Meanwhile, at a local theatre, famed author Charles Dickens (Simon Callow) prepares to give a dramatic reading, lamenting on the situations that have recently befallen him, here, far away from his family. Unknown to him, the body of Mrs. Peace, infected with the glowing gaseous light, is in the audience, while outside, Gabriel Sneed (Alan David), the proprietor of the undertaking firm, attempts to locate him with the help of his servant girl, Gwyneth (Eve Myles), who seems to possess a second sight that would enable her to find them. In the middle of Dickens' reading, Mrs. Peace suddenly reanimates again, releasing ghosts into the theatre, causing a mass panic that attracts the Doctor and Rose. However, when they arrive, the ghosts are already unleashed, and fly into the chandeliers, fed by gas jets. Rose discovers that Sneed and Gwyneth are attempting to take away Mrs. Peace's body, but before she can alert the Doctor, Sneed chloroforms her and they put her into the hearse.

The Doctor heads off in pursuit of Rose, taking Dickens' cab as the writer protests. Once inside, after the Doctor realizes whose presence he is in and attempts to make amends by showing his massive interest in Dickens' books, the writer suddenly takes the spirit of adventure, bidding his driver to pursue the hearse. They arrive at Sneed and Company, where Gwyneth attempts to stop them from entering. But Rose, who is now awake and has suddenly been confronted by the reanimated bodies of both Mrs. Peace and Mr. Redpath, screams to get out of the room, allowing the Doctor and Dickens to enter and rescue her. The bodies are once again left behind by the gas creatures, who enter the pipes as the Doctor realizes that he is dealing with an alien intelligence. Sneed and Gwyneth later apologize, but they claim they weren't certain what to do; for years, the building has been haunted by these creatures, which are somehow tied to Gwyneth. Dickens won't believe a word of it, looking for hidden wires, something, anything to prove that this is trickery and everything he has believed in is still true. Gwyneth later speaks to Rose, using her telepathy to see into Rose's mind, and the strange city of metal boxes (cars) and flying metal birds (airplanes) that she comes from, as well as a darkness that she cannot explain.

The Doctor decides to hold a seance, as he realizes that Gwyneth can be his medium; she's been having these visions since she was five years of age, and therefore is likely tied to these creatures telepathically. Their leader comes forward, a glowing alien entity that calls their race the Gelth, a race that was decimated by the "Time Wars" and exists only in a parallel reality, connected to this one by a rift that centers on this house. The Gelth only want to reclaim the dead bodies here on Earth to exist in physical form, their "last hope" for a normal existence; the bodies' decomposition provides the necessary gas emissions that allow the Gelth to achieve corporeality. Rose protests, possession of dead bodies being unthinkable to her, not to mention disrespectful... but the Doctor tells her to adjust to a new reality. Dickens realizes that, in fact, these are alien creatures, and has a revelation. Gwyneth agrees to help by opening the rift, which is located in an archway in the morgue. Unfortunately, after she allows the Gelth to use her as a conduit, their true intentions are made known: they are legion, and are in fact going to kill every human being on Earth in order to inhabit this planet. They begin with Sneed, who dies and is then reanimated as several dead bodies come after the Doctor and Rose. Dickens flees, but has a change of heart when he sees the Gelth ghosts, now outside the building, attracted by the gas lanterns; he goes back into the house and turns on all the gas pipes, saturating the air with gas and therefore pulling the Gelth spirits out into the air. Gwyneth realizes what she needs to do to close the conduit and stop the Gelth from their invasion plans... and after the Doctor, Rose and Dickens escape, she lights a match, blowing up the Sneed and Company building and taking herself -- the Gelth's only hope to cross over to this world -- with it. Rose realizes that this servant girl saved the world, and no one will ever know.

Dickens accompanies the Doctor and Rose back to the TARDIS; the writer is once again in high spirits, wishing to return to London to reconcile with his family and begin writing again, basing his next book about these experiences. The Doctor and Rose bid him farewell as the TARDIS dematerializes, the Doctor noting to Rose that, sadly, Dickens will not last but another year, and his tales will come to an end without the world ever finding out about the invasion by the ghosts of Cardiff... but for today, Charles Dickens is a happy man, as he strolls down a Cardiff street on Christmas Eve. "God bless us," he says, "every one."