When the lights are bright in the main room and dark in the blue room, the reflected image cannot be seen. The lighting of the actor in the hidden area can be gradually brightened or dimmed to make the ghost image fade in and out of visibility. Not noticing the glass screen, the audience mistakenly perceive this reflection as a ghostly figure located among the actors on the main stage. The plate catches a reflection from a brightly lit actor in an area hidden from the audience. Care must be taken to make the glass as invisible as possible, normally hiding the lower edge in patterning on the floor and ensuring lights do not reflect off it. Generally, this is arranged with the blue room to one side of the stage, and the plate on the stage rotated around its vertical axis at 45 degrees. A plate of glass (or Plexiglas or plastic film) is placed somewhere in the main room at an angle that reflects the view of the blue room towards the audience. The core illusion involves a stage specially arranged into two rooms or areas, one into which audience members can see, and a second (sometimes referred to as the 'blue room') that is hidden to the side. Products have been designed using a clear plastic pyramid and a smartphone screen to generate the illusion of a 3D object. The installation may be a site-specific one-off, or a use of a commercial system such as the Cheoptics360 or Musion Eyeliner. Such setups can involve custom projection media server software and specialized stretched films. It is often wrongly described as 'holographic'.

In the 2010s, the technique has been used to make dead or virtual artists appear onstage in live concerts, with examples including Tupac Shakur and Michael Jackson. Teleprompters are a modern implementation of Pepper's ghost. These include the Girl-to-Gorilla trick found in old carnival sideshows and the appearance of 'ghosts' at the Haunted Mansion and the 'Blue Fairy' in Pinocchio's Daring Journey, both at the Disneyland park in California.

The illusion is widely used for entertainment and publicity purposes. This launched an international vogue for ghost-themed plays, which used this novel stage effect, during the 1860s and subsequent decades. It is named after the English scientist John Henry Pepper (1821–1900) who began popularising the effect with a theatre demonstration in 1862. Pepper's ghost is an illusion technique used in the theatre, cinema, amusement parks, museums, television, and concerts. To the audience, it appears as if the ghost is on stage A brightly lit figure out of the audience's sight below the stage is reflected in a pane of glass placed between the performer and the audience.

Ghost pepper