The Haunted Forest is a regular, non-jungle forest area on Seaside Island meant to simulate the experience of entering a haunted location inhabited by ghosts. The entrance is through a menacing gate. For a fee, people can pass through the forest during nighttime.
The forest is filled with cheap special effects and atmosphere music meant to set as eerie a mood as possible during nighttime. The effects include moving rubber bats, torches, light chains simulating glowing eyes, a cardboard moon, recordings of moans, fake cobwebs and spiders, tombstones, and pressure pad-activated mechanisms that drop fake ghosts. For government-weary customers like Sticks the Badger, the forest also has proposals for government mandates.
Opened by T.W. Barker and safeguarded by his Stunt Bears, the Haunted Forest got several visitors during nighttime, including Team Sonic and Dr. Eggman who visited it together. While Sticks got frightened by the forest's government mandates, Eggman got traumatized by its fake ghosts despite initial skepticism. Taking pity on Eggman, Sonic and Tails took him on a walk with Barker through the forest to show him that he had nothing to fear. Barker later moved the Haunted Forest's venue to Eggman's lair after getting Eggman to sign it over to him by tricking him into thinking that real ghosts from the forest had invaded his lair.
- The Haunted Forest has a daytime walkthrough meant for preschoolers.
- T.W. Barker claims that the Haunted Forest was opened on a Gogoba burial ground. However, it is unknown whether this is the truth or it is something Barker fabricated for his plot to trick Dr. Eggman.