The film is presented as a found footage documentary-style movie shot in 1988 by Dennis (Christopher Nicholas Smith) and his girlfriend Julie (Lauren Bittner). Dennis is a wedding videographer, and Julie is a babysitter for sisters Katie (Chloe Csengery) and Kristi (Jessica Tyler Brown). When strange occurrences begin happening at the sisters’ home, Dennis decides to set up cameras around the house to document the events.
As the days progress, the sisters’ interactions with an invisible entity become increasingly disturbing. The paranormal activity is focused around an imaginary friend named Toby, whom Kristi claims to be friends with. The activity intensifies, leading Dennis to investigate the sisters’ mother, Julie, who seems to be involved in a cult.
The climax of the film takes place during a visit to the girls’ grandmother Lois’s house. Dennis discovers a mysterious symbol in the basement, indicating a connection to demonic forces. The entity’s presence becomes more aggressive, and Dennis attempts to protect the sisters.
In a terrifying sequence, Dennis is attacked by the invisible force, and his fate is left ambiguous. The film concludes with Julie returning to the house to find Dennis missing, and the sisters displaying eerie behavior, hinting at their potential possession by the demonic entity.
The post-credits scene connects the events of “Paranormal Activity 3” to the first two films, revealing a connection between the sisters’ family and the haunting experienced by Katie and Kristi in their adulthood.
“Paranormal Activity 3” was praised for its effective use of suspense and scares, contributing to the success of the found footage horror franchise. The prequel format allowed the film to delve into the origins of the haunting and tie together elements from the previous installments.