The story of the Red Ghost began in 1883 at a ranch near Eagle Creek in southeastern Arizona. The Apache wars were ending, though a few renegade bands still prowled the area as isolated ranches far from any neighbors were easy targets for the occasional Apache raid. Early one morning, two ranchers rode out to count their sheep, leaving their wives and children behind. Some time that morning, one of the women went to a nearby spring to get a bucket of water. Suddenly, the other woman who was inside the ranch heard the dog begin to bark followed by a terrified scream. When she peered out the window, she saw a reddish-colored beast race by. Riding on its back was an evil looking creature that some thought to be the devil.

Horrified, she locked herself and her children up in the house until the men returned home and told them of what she saw. When they searched by the spring, they discovered the other woman's body, which had been trampled to death. The next morning when they went back to the area, they discovered reddish strands of hair and cloven hoof prints that were much larger than a horse's and nothing like they had ever seen before.

A few days later, prospectors who were camping nearby close to Clifton, Arizona reported awakening to the thundering sound of hooves and people screaming. Though their tent collapsed, they managed to escape just in time to see a large creature run off. The next day, another woman was found trampled to death. As news of the beast, which came to be known as the Red Ghost spread, people began to make up or embellish stories. One man claimed to have seen the creature kill a grizzly bear and eat it, while another said that he actually chased it, but that it vanished in front of his eyes.

Months later, two other prospectors were searching for precious metals along the Verde River when they spotted the Red Ghost, again with something attached to its back. They fired their guns at the creature but missed. However, as it ran away they saw a chilling object fall from its back: a human skull with flesh still covering part of it. Embedded into the flesh was strands of red hair.

About a year afterwards, a cowboy near Phoenix caught sight of the creature grazing on grass while he was on his horse. Wanting to capture the beast, he took out his rope out and managed to lasso the animal's head with it. However, instead of attempting to running away, it charged at him and knocked both him and his horse to the ground. As it galloped away, the cowboy saw that on its back was a headless skeleton.