Clive Barker came to prominence in the mid-1980s with a series of short stories, compiled in the Books of Blood, which established him as a leading horror writer. Several of the stories have been adapted into film, including "The Forbidden", which became Candyman.

While Barker's original story revolved around the themes of the British class system in contemporary Liverpool, director Bernard Rose chose to set the film in a public housing development in Chicago and focus on the themes of race and social class in the inner-city United States.

Helen Lyle is a Chicago graduate student completing a thesis on urban legends.

Helen hears a local story about the Candyman, who can be summoned by saying his name five times in front of a mirror, causing him to appear and kill the summoner.

He has a bloody hook, which he uses to mutilate his victims.

Candyman was the son of a slave who became prosperous by mass-producing shoes during the Civil War. At an early age, he was accepted by white society. A well-known artist, he was sought after to paint portraits of wealthy landowners and their children.

After falling in love with a white woman he was hired to paint, and fathering a child with her, the Candyman was set upon by a lynch mob hired by his lover's father. They cut off his right hand, then smeared him with honey stolen from an apiary, which attracted bees that stung him to death. His corpse was burned and his ashes were scattered across the land on which the Cabrini-Green housing project was later built.

Helen is confronted by the Candyman, who tells her that because she has discredited his legend, he must "shed innocent blood" to perpetuate it. Helen blacks out and wakes up in Anne-Marie's apartment, covered in blood. Anne-Marie returns to discover that her dog has been decapitated and her baby stolen.

Skeptical of the legend, Helen and her friend Bernadette Walsh had repeated the Candyman's name to Helen's bathroom mirror earlier in the film, but nothing happened ... until much later.

Bernadette shows up at Helen's apartment, where she is murdered by the Candyman. Helen is framed for the crime, sedated, and put in a psychiatric hospital.