Dr. Blinn, a Santa Barbara psychiatrist, has been murdered in his office. Shawn and Gus show up at the crime scene and are promptly removed by Lassiter, but not before Shawn gets a quick look around - blunt force trauma to the head, the weapon and a chewed toothpick next to the body.
Back at the Psych office, Shawn wants to take the day off, the beach is calling. Just then, a disturbed man, Robert Dunn, walks in asking for help. He claims he's being haunted and the ghost is trying to kill him. He even has strangulation marks on his neck to prove it. Shawn immediately believes the guy is crazy but Gus is strangely intrigued - turns out Gus spoke secretly to a spirit as a child. Shawn reluctantly signs on for the case, since he believes this will be easy because there are no such things as ghosts. They'll find who's doing this to him and have a fake exorcism, no problem.
At Robert's house, Shawn sees long red hair on some paintings and photos with Robert's face X'ed out. And the place is a mess. Robert asks them to stay the night. He hasn't been able to sleep. He's going crazy.
Shawn's already solved the case. Clearly, Robert's ex-girlfriend is mad and trying to drive him crazy. From the pictures, Shawn knows he dated a red head and since his place is a disaster, she's clearly not around any more. Plus, the X'ed out faces of Robert in all the pictures. They'll talk to the girlfriend tomorrow. There's no danger at all - until they wake up in the night to find the house on fire!
Meanwhile, Lassiter and Juliet are looking for a Regina Kane, Dr. Blinn's last scheduled patient before he was killed. They've tracked down a post office box for her but that's it. Shawn and Gus come across them and Shawn notices they are holding a medical file with Regina's name on it, he now knows where the police are looking.
Back on their case, Shawn drags Gus up to San Francisco to see Robert's ex-girlfriend. She tells them she and Robert broke up because a friend of hers saw him out one night with another girl. He pretended like he didn't know the friend and called himself Martin Brody. Shawn notices she's wearing an engagement ring. She hasn't thought about Robert in a while. She's not their ghost.
On their way back, their car is nearly rammed by another one. The driver crashes and runs away. Gus smells alcohol in the car. Someone was drunk. But Shawn notices another chewed toothpick in the car. This wasn't an accident. They have a new suspect for Robert's ghost.
They go back to see Robert but he's not around. They think the person who tried to kill them might have come after Robert. They search the house for him but instead find a room filled with women's things - including large shoes and a red wig. Shawn's got it. Robert is unaware he has a split personality. He's been haunting himself!
When they finally are able to trigger Robert's other personality, they are only successful after Shawn sees a date book showing an appointment with Dr. Blinn the day he died. He realizes this is the Regina Kane the police have been looking for. They start speaking to Regina and she appears. They realize Regina isn't violent, there must be a third personality. She tells them she was seeing Dr. Blinn but won't tell them why. She has no idea who killed him.
They go to the police to let them know they've found Regina King. While there, they see her patient file. Turns out, she wants gender reassignment surgery. That means ALL the personalities will get it. The third personality - Martin Brody - killed the doctor to protect himself. Shawn remembers Regina has an appointment scheduled with another doctor right now. That doctor's in danger. Shawn, Gus, Lassiter and Juliet rush in, stop "Martin" and save the doctor. Both cases are now solved and Robert is safely in therapy.