The film Sleepy Hollow begins in a note when in the year 1779, a young constable named Ichabod Crane ( played by Johnny Deep) is sent from New York City after getting into an argument with a judge over the archaic use of torture. Since the need is to teach the fellow constable a lesson of the lifetime, the honourable judge sends Ichabod to the fledgling settlement of Sleepy Hollow regarding the investigation of a series of ghastly murders. On Ichabod's arrival, Baltus Van Tassel (played by Michael Gambon) and the town council inform him that the three/four victims, Dirk and Peter Van Garrett, the widow Emily Winship, and the widow's unborn child (which is learnt later) to Peter Van Garrett, were killed on open ground, and their severed heads are believed to have been taken by a headless ghost. Ichabod is skeptical, but proceeds to learn more about the ghostly Headless Horseman! It is the ghost of a Hessian mercenary (played by Christopher Walken) a horseman who rode a great black stallion named Daredevil. He and other mercenaries were sent by German princes during the Revolutionary War. The Hessian came because of his love of killing and battle—he was renowned for cutting off heads at full gallop. The Horseman was killed in the winter of 1779 in the woods west of Sleepy Hollow where a group of soldiers overpowered him, decapitating him with his own sword. Although Ichabod is initially spooked by the story, he maintains the killer must be of flesh and blood, and will be found. That night, a man named Jonathan Masbath is killed by the Horseman. When Ichabod sees the ghost kill one of the town council members, Magistrate Philips, his skepticism evaporates, overwhelmed by superstition. He soon discovers that the Horseman's ghost seems to have a connection to Baltus Van Tassel, a wealthy farmer and the last remaining plutocrat of the Sleepy Hollow. In the meantime, Ichabod finds himself tob trapped in love of the daughter of Van Tassel, Katrina (played by Christina Ricci). What is the charm of Katrina? Katrina is intelligent and sweet yet eccentric, and refers to herself as a "good witch", having studied a book about white witchcraft..

However, as the film progresses the joint effort of Ichabod, Katrina, and Young Masbath (Ichabod's self-assigned assistant) becomes victorious to come upon the Horseman's grave at the foot of the gnarled Tree of the Dead, after receiving directions from a possessed witch. The Horseman soon kills four people afterwards, the Kilian family and local boy Brom, who is killed trying to kill the Horseman. Crane surmises, he rises to cut off heads "'til his own is restored to him," and that he is in the service of a living villain. Ichabod summises that it is Baltus who is controlling the Horseman, in order to gain complete control of Sleepy Hollow, but Baltus is later killed by the Horseman in a bloodbath at the local church. It is revealed through nt few incidents that Lady Van Tassel (played by Miranda Richardson) or Katrina's stepmother, stole the Horseman's head and is using it to control him. The film then enters its climax. After a lengthy chase, Ichabod returns the Horseman's head to its rightful owner, rescuing Katrina in the process. The Horseman, head returned, grabs Lady Van Tassel, kisses her violently, and dives back into the Tree of the Dead, dragging his one-time captor back to the netherworld with him, leaving only her hand behind.

The film ends in a jubilant note in the preparation for a new century. he final line of the movie, "The Bronx is up, the Battery's down," quotes the lyric for Leonard Bernstein, Betty Comden and Adolph Green's song, "New York, New York" from On the Town.