Madame Leota is arguably one of the most popular ghostly presences in the Haunted Mansion. There are two variations of her story; one innocent and one sinister, both intertwined with Disney lore.
Theory One
There has been no official background story about Madame Leota from Disney; so one must use the clues left by Imagineering to piece together her story.
Memento Mori is said to be the location of Madame Leota’s home when she was alive. Inside many of her personal effects are on display. She was close to the Gracey family, earning her a room in the mansion and a burial in their family plot.
In Disneyland, she does not have her own store; however, she does have a caravan wagon where she worked as a Psychic Medium.
It is safe to say Madame Leota dabbled as a clairvoyant/fortune teller and was loved by the Gracey family. We never learn how she passed or how her spirit ended up in a crystal ball; although we can make some pretty good guesses about the latter.
Theory Two
Now we get to the good stuff! According to Ghost Gallery. unofficial lore from Cast Members who worked inside the Haunted Mansion, Madame Leota’s story is far more sinister. Get ready for this doozy of a story…
Leota was born in the swamps of Louisiana to a nomadic woman and a voodoo priest. She was schooled in the arts of the occult and was taught to manipulate others without any regard. She was reportedly bitter and could easily fly into a rage; however, it was when she was calm and calculating that she was the most frightening.
She eventually made her way to New Orleans, where she earned some coin reading palms and holding seances. Even though she would sometimes use effects for show purposes, Leota was the real deal. It was in New Orleans she met George Gracey Jr. and saw the opportunity of a lifetime. Gracey was young and trying to figure out his new life as a Master of his family manor.
Gracey was spellbound by Leota and her abilities. She moved into the mansion with Gracey and his wife, Lilian. Frequently calling on his personal clairvoyant made it easy for Leota to manipulate him to her will and they inevitably became romantically involved. Soon after, well 9 months after, Leota gave birth to a daughter, Little Leota, named after her mother. Lilian and Leota despised each other; and both plotted to get rid of one another. Lilian just wanted Leota fired but Leota wanted Lilian dead.
One evening, Leota hypnotized Lilian into performing an old tightrope act for the family. During the show, Leota summoned an alligator to attack Lilian, killing her.
Look familiar? Master Gracey’s first wife Lilian O’Malley Gracey.
At the urging of Madame Leota, Master Gracey remarried shortly after the death of Lilian (he picked up his new 16 year old wife at her parent’s funeral 
). Emily Cavanaugh was young, beautiful, and wealthy. After their wedding, Gracey and his young bride were playing hide-and-seek. Still in her wedding dress, Emily ran up to the attic and hid in a large, stuffy chest. Leota seized the chance to take her out by locking Emily inside the chest, where she suffocated.
Meanwhile, Little Leota ran amuck around the mansion pranking everyone and helping her mother with seances. She grew up within the mansion and reportedly made her father, Master Gracey, very uneasy. As she should have because “Little” Leota murdered some people of her own. Click here for that crazy story.
Many years later, Madame Leota attempted to open up a portal to the spirit world. Master Gracey put his foot down, which lead to a huge argument. It was then that he learned Leota had murdered his wives (how did he not see that?!) and attempted to leave. Leota used her powers to control the servants, cutting off all exits and funneling him up to the attic. Infuriated, she attempted to imprison him inside her crystal ball. In despair, Gracey hung himself, the spell went awry, and Leota accidentally trapped herself in her crystal ball. If that ain’t karma, I don’t know what is.
With limited powers, Madame Leota found a final resting place within the mansion where she continues to call to the spirits.
There you have it! Perhaps elements from both theories can build her backstory. Regardless, Madame Leota is an intriguing force to be reckoned with!
