Wikipedia page, a post on the mythbusting/fact-checking site Snopes.com, a plethora of YouTube videos devoted to the subject, and numerous mentions in movies and television shows. If, somehow, you have never heard this story, it goes like this:
In Colonial times, there was a beautiful woman named Mary Worth who found herself in the unfortunate position of being an expecting, but unwed, mother. The fact that Mary didn't seem to be bothered by her sin, and that she still seemed to capture the wandering glances of many of the men in the town, infuriated her Puritan neighbors. When Mary had her baby, the townspeople stole it away from her. Claiming that it was the spawn of Satan, they buried it alive as it flailed and screamed. The townsfolk then accused Mary of being in league with the devil and decided she must be burned as a witch. Mary was dragged to the center of town and tied to a stake as the townsfolk beat and slashed her face with the sticks that they would use to burn her. One woman held a mirror up to Mary's face, taunting her to look and see how she was no longer beautiful, she was dirty, and broken, and bloody. "Bloody Mary" she called her, and as the pyre was lit and the flames began to climb, the crowd chanted the name over and over again. Mary screamed as the flames licked her legs and her thighs, and as the acrid smell of burning flesh filled the air, the crowd became hushed. In the lull, Mary cursed the townspeople for what they had done and claimed she would visit vengeance upon them and all of their future generations, they would know the anguish they had put her through. As the flames climbed higher, the form that had been Mary Worth began to disappear, but the last words of the curse lingered in the ears of the townspeople, seemingly echoing off of the surrounding trees and buildings. Then, suddenly and without explanation, the mirror that had been held up to Mary's face shattered, slicing the hand of the woman who had initially taunted her. About a week later, the woman fell ill and died. Soon after, many of the townspeople who had taunted Mary began to meet with ill fated deaths, all in rooms with broken mirrors. It is said, that Mary still seeks vengeance to this day. All you have to do conjure her is to light a dark room with a candle, stand in front of a mirror, and say the name "Bloody Mary" five times in succession. Her face will appear in the mirror in front of you, and if you are descended from one of the townspeople that taunted her, or if she believes that you are taunting her, she will reach through the mirror and slash your face as hers was, or break the mirror cutting you all over, or, she may even pull you into the mirror with her so that you will never be seen again...
At this point, other people would usually chime in about how they heard about a girl from the next town over who had conjured Bloody Mary and was cut all over by shattered mirror glass, or about a boy that tried it and disappeared, never to be found, etc. etc.
Of course, at some point, we've all tried it, and, of course, nothing bad happens. So, how does a story like this get started. Well, a report that was published earlier this year, describing an interesting illusion (pdf), may shed some light on the subject. The author of the paper, Giovanni Caputo describes what he calls the "Strange Face in the Mirror Illusion", and it may be that this illusion spawned stories like this one that revolve around ghosts in the mirror. To characterize this illusion, Caputo got 50 volunteers, who had no idea what they were supposed to see, and had them stare at themselves in a mirror in a dimly lit room. At the end of a ten minute period, the volunteers were asked to write down what they saw. Two thirds of the participants reported seeing huge deformations of their own face, and nearly half reported seeing "fantastical" or "monstrous" beings. Smaller proportions reported seeing the faces of parents, or of ancestors, and some saw the faces of strangers, including old women and children. In all 50 cases, the participants reported some form of dissociative identity effect, which is to say, they felt like what they saw in the mirror was someone (or something) other than themselves. Many felt like they were being watched by the "other" in the mirror, and some reported getting scared or anxious because they felt that the face in the mirror looked angry. Caputo offers some speculations as to what might be causing these effects, but as yet, there is no complete explanation for all of the phenomena that were reported.
Likely, there are several things at play. First, is the Troxler effect, which is an illusion where focusing on an object causes objects in the periphery to seemingly disappear (nicely illustrated by the following figure: stare at the + in the middle for about 20-30 seconds, and the purple dots should start to disappear, though you may still see the moving "green" dot that is the negative image your brain perceives when a purple dot disappears...)
While Caputo discounts the Troxler effect because it should predict the disappearance of one's face rather than the appearance of a new face, it may be that an incomplete Troxler effect (due to lack of a solid fixation point) could lead to skull like apparitions (where the eyes and nose disappear) or other changes that could result in an unrecognizable face (when I tried this experiment myself, the Troxler effect was the first thing I noticed, and the strongest effect throughout, sometimes causing it to seem like my whole face had disappeared). Also, it may be that the disappearance of one's own face causes the brain to fill in the void with imagined faces since it is expecting to see a face there.
Instead of, or perhaps in addition to, the Troxler effect, Caputo points to the "Multiple faces phenomenon" (pdf) which is an illusion that plays upon both the weaknesses of our peripheral vision, and the higher order neurons that integrate facial features to make the faces that we see recognizable. When black and white photographs of familiar faces are viewed so that the face is centered on a blind spot, people have reported seeing different features and even different faces (i.e. white eyes, facial hair that's not present, upside down faces, the subject's own face, other faces than what is shown, etc.). Many of these characteristics were similar to what was reported in the "strange face in the mirror illusion", and many of the same conditions appear to be necessary for both illusions to work. For example, the "multiple faces phenomenon" works much better with black and white photographs than with color photos, while the "strange face in the mirror" illusion relies on low level lighting that makes it difficult for subjects to perceive color information. Additionally, the multiple faces phenomenon seemed to work better when the photos were of faces familiar to the viewer, and the mirror illusion relies upon the most familiar face of all, the viewer's own.
Regardless of the cause, it is clear that these illusions are pretty common (84% of respondents for the multiple faces, and 66% for the face in the mirror), and they can be pretty spooky. So if you want to give yourself a scare this Halloween, you can try it out and see for yourself. All you need is a 25 watt incandescent light placed behind you so that you can't see the light directly or it's reflection, and five to ten minutes of staring at yourself in the mirror (from about 1.5 - 2 feet away). If you get the conditions right, it might even be a lot of fun to convince your friends or family that your bedroom mirror is haunted, all you have to do is tell them to stare into the mirror for a few minutes and wait for the ghosts to appear. If you do try it out, feel free to leave descriptions of what you saw in the comments, and have a safe and Happy Halloween!
Caputo, G. (2010). Strange-face-in-the-mirror illusion Perception, 39 (7), 1007-1008 DOI: 10.1068/p6466
de Bustamante Simas, M., & Irwin, R. (2000). Last but not least Perception, 29 (11), 1393-1396 DOI: 10.1068/p2911no