It also introduces a new enemy, the Obake Stand. Completing this level is not required to advance in the game, but doing so unlocks a red Toad House.
When the level starts, a door can be seen; however, if the players attempt to enter, Boos laugh and the door disappears, leaving a coin behind. Behind the starting point is a wall with a hidden area with the first Star Coin inside. The players should go up the staircase while some Obake Stands and confronting two Boos. At the end of the path is another fake door, but there is a hidden area in the wall containing the actual door leading to the next room. Once there, the players must climb up poles while avoiding Boos. At the end of this area is another Star Coin hidden below the door. The next chamber is similar to the first one, except that the hidden area behind the wall contains a Coin Block instead of a Star Coin, and a rope is extended on the ceiling. Mario should grab it and then fall onto one of the moving platforms leading to the exit. Outside, the players must avoid a Boo guarding the flagpole.
- Star Coin 1: At the very start of the level, the first Star Coin is in a hidden area in the left wall.
- Star Coin 2: Similar to the first Star Coin, the second Star Coin is in a hidden area in the wall to the left of the four parallel poles.
- Star Coin 3: Mario and co. must follow the path to the secret exit. While on the falling platform, about halfway down on the right is a hidden area that contains the third Star Coin.
Upon seeing the first yellow moving platform in the third room where the player is climbing ropes on the ceiling, they should stop and wait until it moves away. The player should then fall, landing on a hidden platform with a door. When they go into this, they will discover a platform slowly descending, with countless Boos floating around. If the player survives, a door is seen. This exit unlocks the World 3-Cannon, taking the player to World 6.