Phantasm IV: Oblivion picks up where Phantasm III: Lord of the dead left off. Mike flees from Boulton mortuary in the hearse, while Reggie is trapped inside by the Tall Man's spheres. Rather than kill Reggie, the Tall Man let's him go, saying he is doing so "to play one last game."
Jody, now a sphere than can occasionally take human form, contacts and persuades Reggie to search for Mike. Along the way, Reggie survives a demon attack and rescues a woman, "Jennifer", from a car accident. They stay the night at an abandoned motel where Reggie tells her the story of the Tall Man. Jennifer is not what she appears to be, however, and attacks Reggie with two spheres hidden where her breasts should be. Reggie destroys her with the use of a sledgehammer and his tuning fork.
Meanwhile, Mike tries to uncover the mysteries of the Tall Man in order to escape his transformation into a sphere. He drives the hearse through abandoned areas, recalling the last days of his youth before the Tall Man's arrival, and ends up in Death Valley. He writes a last testament in which he expresses his intent to force the Tall Man into a final confrontation. As the Tall Man interrupts his attempted suicide, Mike passes through a gateway. He meets a kind man named Jebidiah Morningside, who tries to speak to Mike. Mike, however, is frightened away, because Morningside looks just like the Tall Man.
Back in Death Valley, Mike realizes he can move rocks with the power of his mind. Jody appears, but a distrustful Mike accuses his brother of having abandoned him. After defending his behavior, Jody disappears. Mike begins working on the hearse's engine, apparently using parts to build a makeshift sphere. Theorizing that Jebediah must somehow become the Tall Man after traveling through the gateway, Mike plans to prevent Jebediah's first journey. He goes through the gate, but finds himself now in a deserted city and barely manages to escape the Tall Man with Jody's help.
Reggie arrives at Death Valley and fights off a group of zombie dwarves shortly before Mike and Jody reappear through a gate. Mike embraces Reggie and tells him not to trust Jody. Taking Reggie's tuning fork, Mike and Jody pass through the gate and appear this time in Jebediah's house. Invisible to Jebediah, they witness how he perfects his craft and approaches the inter-dimensional gate he has built. Mike unsuccessfully attempts to stab Jebediah, who vanishes, replaced moments later by the evil Tall Man who emerges in his place. The Tall Man, capable of seeing Mike and Jody, forces Mike to escape through the gate.
Jody finds Mike in a cemetery and attacks him. Awakening on a mortuary slab, Mike uses Reggie's tuning fork to immobilize Jody and the Tall Man as they attempt to saw open his head. He kills Jody with the makeshift sphere he built from the hearse's engine, but the Tall Man quickly revives and uses his telekinesis to take the tuning fork from Mike. Again, Mike escapes through the gate back to Death Valley, this time pursued by the Tall Man.
Reggies tries to shoot the Tall Man, but is overpowered. Mike then summons his makeshift sphere and uses it to impale the Tall Man in the neck. Amused by what he calls Mike's "toy", the Tall Man is distracted as Mike activates the hearse's motor, which turns out to be the true weapon—an inter-dimensional bomb. The Tall Man is supposedly vanquished as the explosion consumes both him and the hearse; however, another Tall Man immediately comes through the gate, revealing the Tall Man to be but one of many. Resuming the surgery started by his predecessor, the Tall Man removes the golden sphere from Mike's head and passes through the gate.
Reggie arms himself and chases after the Tall Man through the gate. Close to death, Mike recalls a childhood memory of him climbing into Reggie's ice cream truck as they both drive off into the dark night. In this memory, Reggie and Mike hear each other's last exchange of dialogue from the present before Reggie went through the gate after the Tall Man. Reggie (in the memory) asks Mike if he hears the voice, but Mike (in the memory) brushes it off, saying "it's just the wind."
- A. Michael Baldwin as Mike
- Reggie Bannister as Reggie
- Bill Thornbury as Jody
- Heidi Marnhout as Jennifer
- Bob Ivy as Demon Trooper
- Angus Scrimm as The Tall Man/ Dr. Jebediah Morningside