The Innocents (1961), directed by Jack Clayton, is one of my favorite ghost stories! I think that Deborah Kerr gives her best performance in this film. She plays Miss. Giddens in the film. I'm also impressed by the performance given by Martin Stephens, who is the young boy Miles in the film.
Miss. Giddens is hired to be the governess to two orphaned children, Flora and Miles. She is hired by their bachelor uncle, who is more concerned about keeping his playboy lifestyle than taking care of his niece and nephew, and overlooks the fact that Miss. Giddens hardly has any experience with being a governess. Once Miss. Giddens arrives at the estate, she is entranced by its beauty, largeness, and secludedness. However, soon after her arrival, she becomes aware of two deaths that had occurred on the grounds. The two deaths involved the former governess, Miss. Jessel, and the former valet man, Peter Quint, who had a love affair. She becomes to believe that the spirits of these two lovers are possessing the children and decides that she must do something to save them!
This film is very psychological. It's hard to tell whether Miss. Giddens is actually insane and only imagining the spirits or if the spirits are indeed present and possessing the children. I've watched this film several times and I'm still not sure what to think. Either way, the outcome of the film is disturbing. Watch it and see for yourself!