After Shawn Spencer convinces the police he is psychic in order to get out of an aiding and abetting charge, Interim Police Chief Vick hires him to help out on a high-profile kidnapping case, being led by Detective Lassiter. Shawn brings in his best friend Gus to help him find the missing man and they soon realize this kidnapping isn't what it seems to be. Now he must "psychically" lead the cops in the right direction, which ends up taking a sudden and unexpected turn.
The favorite to win this year's Regional Spelling Bee passes out under mysterious circumstances in the middle of a word. As Shawn and Gus investigate, the Spellmaster falls over a railing to his death. Lassiter thinks it's obviously an accident but Shawn is sure it's murder.
The Attorney General's son is getting married this weekend and someone has stolen the $5 million antique engagement ring from the hotel safe. Lassiter wants to do this by the book, but after Shawn finagles his way into an invitation to the festivities from the bride and groom, he quickly "divines" that this was an inside job.
A widow of a notorious bank robber comes to Shawn and Gus for help. Her husband's dangerous accomplices have just been released from prison and will come after her with the false assumption she knows where the money is hidden. She now needs Shawn to contact her husband's spirit to find the cash before the robbers find her.
When Shawn is the only one to realize a suicide is in fact a murder, he keeps himself on the case by insisting he's getting information from the sole witness: the victim's cat. It soon becomes apparent that a string of recent suicides may in fact all be murders, and Shawn must "channel" the cat and catch the killer before he can strike again.
For this year's Policeman's Benevolent Association's big fundraiser, Lassiter is running a reenactment of a famous Civil War battle. But when, during rehearsal, a carefully choreographed "death" turns out to be real, Shawn and Gus join the regiment to uncover the truth -- this was no accident, it was murder.
A man comes to Shawn and Gus with a huge problem: he's being haunted by a ghost that wants to kill him. Shawn takes the case, sure he can solve it quickly since there's no such things as ghosts, but as the investigation progresses, they come to realize they might be dealing with something even more strange.
A teenager goes missing, and to Gus' delight, he and Shawn must spend the entire weekend at the boy's last known location -- the Santa Barbara Comic Book Convention -- investigating his disappearance. To gain access to the sold out event, Shawn and Gus become George Takei's personal assistants and soon learn the missing teenager has a secret identity, which might be the reason for his kidnapping.
Henry's old boss Capt. Connors and his daughter Trish come to the Psych Agency for help. Connors, who is suffering from early on-set Alzheimer's, thinks he's solved a murder but he can't remember who's been killed or who the killer is. The police don't believe him so he asks Shawn to psychically look into his head for the answers. Since Connors was always great to him as a kid, Shawn agrees to take the case.
Alone in a bar, Shawn spots Lassiter at a table, drinking heavily, marking a sad anniversary. Lassiter invites Shawn over and proceeds to pour his heart out, confessing that Shawn's skills astound him. While Lassiter doesn't believe he's psychic, Shawn somehow guarantees an arrest, whereas Lassiter, who used to be a great cop, now can't even solve the murder of a local astronomer. Everyone thinks Bryant Vallery died of natural causes, but the guy was relatively young and lived a healthy lifestyle. Lassiter tells Shawn that he knows there's more to it but can't prove it ... then proceeds to pass out.
Vick wants Lassiter to take a case that he really doesn't want to. He looks up and sees Shawn and Gus putting on a psychic show for the other officers and gets an idea. He hands Shawn the case file and tells him the victim is waiting to give a statement. As they walk into the interrogation room, they find a fully unclothed man, Fred Turk. With Lassiter happily watching through the one-way glass, Shawn and Gus proceed to give a very uncomfortable interview in which Turk claims he was abducted by aliens.
Shawn's motorcycle has been impounded, so he and Gus go down to the courthouse to pay the ticket and free the bike. While there, Shawn notices a sweet woman picking up a piece of trash in the hallway. Back at the Psych office, Shawn sees the same woman on TV. It turns out, she's on trial for the brutal murder of a favorite local TV weatherman. She is accused of having sex with him at the studio, then bludgeoning him over the head. But from what Shawn saw of her earlier, he's immediately convinced of her innocence.
Shawn comes to the police station, bored, looking for a case. Gus is out of town at a retreat with his company. While at the station, Shawn sees a man, Leonard Sirtis, talking to Chief Vick. His daughter, Deanna, a highly ranked local tennis player, is missing. The prime suspect is a former stalker of hers, Felix Alvarez. Vick relents to let Shawn locate Deanna psychically while the cops follow conventional leads.
Shawn and Gus are hanging out in the Psych office when Henry pays a visit. He criticizes everything about the place until Shawn stops him. They are waiting for an appointment. Henry says he is their appointment. A friend of his, Bill Peterson, called him and said he thinks his son Brandon is mixed up in something bad. He doesn’t want to call the police and Henry inadvertently made him think Shawn could help. Henry leaves just as Peterson arrives. He tells them that Brandon used to work for him but he fired him in an attempt at tough love. He’s been evicted from his apartment, had his cell phone turned off and forged a check of Peterson’s for thirty thousand dollars. Now’s he’s missing. Shawn and Gus, deliberately against Henry’s wishes, say they can help.
On Halloween night in 1985, Shawn and Gus witness a troubled girl throw herself from her window at the Wispy Sunny Pines mental institution. From that moment on, "Scary Sherry" has haunted the halls of the now abandoned facility where we find a girl, Doreen, being chased by a ghost before falling through the same window to her death below. In the Psych office, Juliet comes to Shawn and Gus for help. She is undercover at the Beta Kappa Theta sorority, of which Doreen was a pledge. The going theory is that Doreen killed herself in a copycat of Sherry's original suicide but Juliet thinks there is more to the story.