The Graveyard Nightmare is one the five Nightmare Worlds Ned can explore in the Nightmare Ned video game. The entryways are marked by a gravestone icon. Controlled by the Graveyard Shadow, it is the creepiest (and in Ned's case, the most personal) Nightmare of the game. The game's instruction manual says that it is a loopy interpretation of Ned's strangest Halloween night. The Graveyard's Nightmare is filled with scary creatures like the grim reaper, zombies, goblins, demons and ghosts. The world's environment bears a strong resemblance to the works of Tim Burton and Edward Gorey.
The Graveyard Nightmare represents Ned's fear towards his and his grandfather's death, along with the deaths of others, such as Ned's parents.
- The sky strongly resembles the painting "The Starry Night" by Vincent Van Gogh.
- One of the tombstones has the word "Capers" on it. This is a reference to the game developers, Creative Capers Entertainment.
- This is the only level that takes place primarily outdoors.
- The game's concept art depicts designs of multiple zombies. However, only one from the concept art is seen in the game.
- The manual shows Ned being cornered by the Zombie Girlscouts near a fence, something which does not occur in either the demo sampler or final product.