Story, Indiana may have nearly disappeared from the map.
But according to decades of guest stories, not everyone left.
Hidden along the winding roads of Brown County, Story is the kind of place you could easily drive past without realizing what you’re missing. Today, the historic Story Inn stands at the heart of what remains of this once-bustling little community.
Visitors come for dinner, weddings, quiet weekends in Brown County and a chance to experience a place that feels removed from the modern world.
But some come looking for someone in particular.
They call her the Blue Lady.
And according to the legend, she still wanders the rooms above the old General Store.
Before There Was a Ghost, There Was Story
Story’s history begins in the mid-1800s.
Dr. George Story received a land patent in 1851 from President Millard Fillmore and settled in the area that would eventually bear his name.
A small community developed around it.
Story once had homes, businesses, a church, a blacksmith and the services needed by families living among the hills of Brown County.
But like many rural communities, Story’s fortunes eventually changed.
The Great Depression took its toll as families left the area. Later changes to the surrounding roads and the creation of Lake Monroe further isolated the village.
Little by little, Story faded.
Buildings disappeared.
Businesses closed.
Nature reclaimed parts of the old community.
But Story never completely vanished.
The historic General Store survived and eventually became the centerpiece of today’s Story Inn.
And upstairs, above that old General Store, is the room that would give Story an entirely different kind of reputation.
The Blue Lady Room
Climb the stairs above the General Store and you’ll find several guest rooms.
One carries a name you won’t soon forget:
The Blue Lady Room.
Story Inn itself describes the room as being named for a ghost reportedly seen by several guests.
But the legend becomes much more interesting when you look at how long people have apparently been telling these stories.
Former Story Inn owner Rick Hofstetter purchased the property in 1999.
Hofstetter later told the Evansville Courier & Press that he examined decades of old guest books from the inn.
Inside, he said he discovered accounts from visitors who had stayed at Story years apart and came from different places.
Some described remarkably similar strange experiences.
And according to Hofstetter, reports of an apparition stretched back more than 30 years before he purchased Story.
That would place some of the stories well before social media—and even before the modern internet made it easy for visitors to know exactly what previous guests claimed to have experienced.
Hofstetter wasn’t exactly eager to proclaim the building haunted, either.
He described himself as a skeptic.
Yet the stories remained.
What Do Guests Say Happens Here?
Spend enough time reading accounts of the Blue Lady and certain details begin appearing again and again.
A woman near the bed.
A figure reflected in a mirror or window.
An unexplained scent.
Something blue.
And a mysterious little blue light.
None of these experiences proves that Story Inn is haunted.
They are stories told by guests, employees and visitors over many years.
But that history of storytelling is precisely what makes the Blue Lady legend so intriguing.
The Woman in the Room
One of the most persistent accounts involves the appearance of a woman inside or around the upstairs rooms.
Descriptions vary.
Some people have reportedly seen a woman standing near the bed.
Others have described seeing a female figure unexpectedly reflected in a mirror or window.
Some versions describe her wearing a long, flowing gown.
Sometimes she supposedly acknowledges the person watching her.
Other times she simply disappears.
There is no way to independently verify those encounters.
But according to Hofstetter, accounts of unusual happenings appeared in Story’s guest books long before he became the owner.
And the mysterious woman eventually acquired a name.
The Blue Lady.
The Smell of Cherry Tobacco
Imagine waking in the middle of the night inside a building that has stood for generations.
Outside, rural Brown County is quiet.
The room is dark.
Then you smell something.
Tobacco.
But not cigarette smoke.
Cherry tobacco.
The unexplained scent of cherry tobacco has become one of the details most closely associated with the Blue Lady legend.
Some versions of the story claim that the woman believed to be the Blue Lady smoked cherry tobacco during her lifetime.
There’s a problem with that part of the story, however.
We couldn’t establish reliable historical evidence connecting that habit to the real woman who supposedly inspired the legend.
So while cherry tobacco remains one of the most recognizable elements of Blue Lady folklore, the explanation for it belongs exactly where it should:
In the legend.
The Mysterious Blue Objects
Then there are the blue objects.
Some versions of the story say guests have discovered small blue items—including ribbons—inside the room.
Other accounts describe the apparition herself as having unusually vivid blue eyes.
Over time, these details became intertwined with her identity.
The woman became…
The Blue Lady.
But perhaps the most famous blue object in the room isn’t something supposedly left behind by a ghost.
It’s something visitors can turn on themselves.
Turn On the Blue Light
Inside the Blue Lady Room is one of Story’s most famous traditions.
A blue light.
And the legend surrounding it is wonderfully simple:
Turn on the blue light and you might summon the Blue Lady.
Indiana Public Media has documented the tradition as part of the room’s folklore, along with reports involving blue eyes and the smell of cherry tobacco.
Does turning on a blue light actually summon anything?
There’s no evidence that it does.
But that’s hardly the point.
For visitors willing to spend the night, turning on that little light has become part of the Blue Lady experience.
You flip the switch.
Turn off the other lights.
Wait.
And listen.
In an old building surrounded by the darkness and silence of rural Brown County…
every creaking floorboard probably starts sounding a little different.
Who Was the Blue Lady?
This may be the most interesting question surrounding the entire legend.
Ask who supposedly haunts Story Inn and you’ll frequently hear a straightforward answer:
The wife of Dr. George Story.
Some later versions of the legend even give her a first name.
But when we started digging into the history behind the ghost story, that answer became considerably less certain.
Dr. George Story was real.
His connection to the founding of the community is documented.
But identifying the mysterious woman reportedly seen by guests as his wife is another matter.
Over the years, paranormal stories, travel articles and retellings have repeated the connection so frequently that it can sound like established history.
It isn’t.
At least, not based on the historical evidence we could verify.
Other versions of the story have even identified the Blue Lady differently, including as the wife of a former innkeeper.
That leaves us with an intriguing possibility.
Maybe nobody originally knew who the mysterious woman was.
How Does a Ghost Get a Name?
Think about how legends develop.
Guests begin reporting strange experiences in an old building.
Some describe a woman.
Years pass.
More stories accumulate.
Eventually someone asks the obvious question:
Who is she?
The village is named Story.
George Story founded it.
Perhaps the mysterious woman was connected to him.
Maybe she was his wife.
Over enough retellings, the word maybe disappears.
She becomes:
Dr. Story’s wife.
Then additional details emerge.
Her blue eyes.
Her clothing.
Cherry tobacco.
Blue ribbons.
Eventually, a collection of unexplained guest experiences develops into the biography of a ghost.
That’s how folklore works.
And folklore isn’t the same thing as documented history.
But that doesn’t make the Blue Lady less interesting.
It might make her more interesting.
What Do We Actually Know?
Strip away the supernatural claims and several parts of the story remain firmly rooted in reality.
Story, Indiana is real.
Dr. George Story is real.
The historic General Store is real.
The Blue Lady Room exists today above it.
And visitors have been reporting unusual experiences associated with Story for decades.
The Story Inn itself acknowledges the legend and describes the room as being named after a ghost reportedly seen by several guests.
Beyond that, we enter the world of personal experiences, oral tradition and folklore.
Was the woman supposedly seen by guests actually George Story’s wife?
We don’t know.
Did she really smoke cherry tobacco?
We couldn’t establish that historically.
Did she have unusually blue eyes?
That’s part of the legend.
And perhaps the biggest question of all:
Was there ever a Blue Lady in the first place?
No historical record can answer that one.
Watch: The Blue Lady of Story, Indiana
Want to experience the legend for yourself?
Watch our short visual journey into the Blue Lady, the mysterious room above the General Store, and the ghost story that has followed Story, Indiana, for decades.
What do you think?
Ghost? Folklore? Or something that still hasn’t been explained?
Tell us your theory in the comments below.
The Story Continues
The Blue Lady hasn’t been relegated to Story’s past.
Her room remains part of the Story Inn today.
Visitors can still stay upstairs above the historic General Store.
And Story continues embracing the legend surrounding its most famous supernatural resident.
More than 170 years after Dr. George Story established his little community among the hills of Brown County, people still travel down Indiana State Road 135 to find it.
Some come for dinner.
Some come for the history.
Some come to escape for a weekend.
And some climb the stairs above the old General Store…
enter the Blue Lady Room…
and turn on the blue light.
Ghost, Coincidence, or Just a Really Good Story?
Maybe the Blue Lady still wanders the rooms above the old General Store.
Maybe generations of visitors have simply experienced the strange sounds, shadows and creaks that naturally come with spending the night inside an old building.
Or perhaps knowing the legend makes every noise in the darkness feel just a little more mysterious.
We can’t tell you which explanation is right.
And we don’t think we should.
Because some stories are better when the final page doesn’t contain the answer.
So if you ever find yourself traveling the winding roads through Brown County, don’t just drive through Story.
Stop.
Walk around the old village.
Step inside the General Store.
And if you’re feeling particularly brave…
spend the night upstairs.
There’s a blue light waiting for you.
Ghost, coincidence, or just a really good Story?
You decide.
Keep Exploring
The Blue Lady may be Story’s most famous legend, but there’s much more hiding behind this tiny Brown County community.
Discover how Story grew from a small 1850s settlement into the nearly forgotten Indiana village that survives today:
→ Story, Indiana: The Town That Almost Disappeared
Then keep exploring with The Town You Passed as we uncover small towns, forgotten places, local legends and unexpected stories hiding along the roads most of us drive right past.
You passed the town. We took the exit.
The Town You Passed 
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