In life, the Furnace Ghosts were people who were infected with tuberculosis during an epidemic. The Vannacutt Psychiatric Institute for the Criminally Insane took them in, but in order to minimize further infection, Dr. Vannacutt had the tuberculosis patients cremated alive in locked furnaces in the asylum's crematorium.
After the tuberculosis patients were killed in the asylum, the Baphomet Idol kept their ghosts bound to the building, along with the ghosts of everyone else who died in the facility.
When Paul, Richard and Ariel remove the Baphomet Idol from the Heart of the House, they flee with it back out of the Heart and into the crematorium, where Desmond Niles confronts them. The Furnace Ghosts, sensing that the Idol is endangered, emerge from the furnaces and attack the group.
The Furnace Ghosts manage to grab Desmond and cremate him alive in one of the furnaces, then attack the remaining three. Ariel and Paul escape the crematorium with the Idol, but the Furnace Ghosts are able to corner Paul and chase him back into the Heart of the House.
The Furnace Ghosts were presumably freed from the house minutes later when Ariel expelled the Baphomet Idol from the building.
- It is possible that the Furnace Ghosts are, like the Hydrotherapy Pool Ghosts, some of the ghosts that are trapped in the place where they died and are constantly reliving their deaths; as they did not appear to follow Paul, Richard or Ariel beyond the asylum crematorium.