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. When the lights in the mirror-image room are raised (with the empty room being dimmed slightly to compensate), the ghost appears out of nowhere

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 virtual artists appear onstage in apparent 'live' concerts, with examples including Elvis Presley, Tupac Shakur, Abba, and Michael Jackson. The technique was used to display a life-size Illusion of Kate Moss at the 2006 runway show for the Alexander McQueen collection The Widows of Culloden.

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 Disneyland 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.

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