Filming took place in and around Queensland on an estimated budget of $84,000,000. The film was released on June 14, 2002, and though it received generally negative reviews, it grossed $275 million worldwide. Reggae artist Shaggy and rock group MXPX performed different versions of the theme song. Shaggy got his stage name from a previous hairstyle of his he says, not from the character. 2004. The Scooby-Doo Spooky Coaster, a ride based on the film, was built in Warner Bros. Movie World in Gold Coast, Australia in 2002.
A sequel, Scooby-Doo 2: Monsters Unleashed, was released in March 26, 2004.
The gang is shown inside a warehouse illustrating a plan to catch the Luna Ghost who has kidnapped Daphne (flying around with her bound and gagged) which goes astray but ends with Scooby and Shaggy causing the Ghost to be caught. After solving the mystery, constant arguments among the members of Mystery, Inc. cause the gang to go their separate ways, much to the sadness of Shaggy and Scooby. Two years later, Shaggy Rogers and Scooby-Doo are approached to solve the mystery of the popular horror resort Spooky Island, reuniting with Fred Jones, Velma Dinkley and Daphne Blake, although none of the latter are thrilled to see each other, except for Shaggy and Scooby who still want Mystery Inc. to re-unite. On the island, the gang meets Emile Mondavarious, the park's owner, who explains his theory that visitors are being cursed. Shaggy falls in love with a girl named Mary Jane, while Scooby is mysteriously targeted by demonic creatures. Velma meets a man named N'Goo Tuana and his henchman, the famous luchador Zarkos, who explains that demons once ruled the island.
The gang visits the island's abandoned ghost castle, where Daphne finds a tetrahedron-shaped artifact called the Daemon Ritus and Velma and Fred find a strange classroom with videos designed to address non-humans. When the gang returns to the hotel, they are attacked by the island demons, who kidnap numerous tourists including Fred, Velma and Mondavarious. The next day, Daphne is captured by Zarkos, while Shaggy and Scooby discover Fred, Velma and the tourists are now possessed by the demons. The two flee with Mary Jane, until Scooby realizes she is possessed as well. In the midst of an argument between Scooby and Shaggy, Scooby falls down a hole, followed by Shaggy, who dives in to save him. Shaggy comes across a vat containing the protoplasmic souls of everyone who was captured, including the rest of the gang, and releases the gangs' souls to their bodies. Velma discovers the demons are destroyed in sunlight, while Daphne and Fred's souls end up in the wrong bodies.
Shaggy steals the Daemon Ritus and reunites with the gang after their souls correct themselves. Coming across Voodoo Maestro, the gang learns that if the leader of the demons absorbs a pure soul through the Daemon Ritus, then the demons shall rule the world for the next 10,000 years. The pure soul belongs to Scooby, while the demons' leader is Mondavarious. The gang puts their differences aside and finally work together to save Scooby, due to Shaggy. They form a plan but it fails and Scooby's soul is extracted. Scooby is saved by Shaggy, wounding Mondavarious in the attempt. Fred and Velma discover he is actually a robot, controlled by none other than Scooby's nephew, Scrappy-Doo, who the gang abandoned years ago due to his egotism. Now vengeful, Scrappy transforms into a giant demon to destroy the gang and rule the world using the tourists' souls he absorbed.
Daphne fights Zarkos above the island's caves, knocking him through the roof, which exposes the demons to sunlight and kills them. Shaggy confronts Scrappy and rips the Daemon Ritus from his chest, freeing the souls and reverting Scrappy to his original self. Shaggy finds the real Mondavarious trapped in a hole and frees him. Scrappy and his minions are arrested. Daphne and Fred kiss, Shaggy and Mary-Jane hug along with Scooby, and Velma hugs a man she met earlier then punching him while laughing. When Mystery Inc. answer to the press, Velma thinks that Fred will take credit for her ideas again (which also happened at the start of the movie), however Fred given Velma get the credit she deserves after feeling bad for her. Mystery Inc. is then re-united after Scrappy-Doo and Zarkos are arrested.
At the end, it shows Scooby and Shaggy eating food at the Spooky Island hotel. They both eat hot peppers and scream as smoke comes out of the hotel.