Attempting to focus on believability rather than action, the writer and director of the film, the Israeli American Oren Peli, chose to shot the picture with a home camera. This makes Paranormal Activity a really realistic film, with natural dialogues, since there was not a real script and actors were given outlines of the story to improvise (the same technique used in The Blair Witch Project). The main theme of the film is a haunted house in San Diego, where a young couple moved, Katie and Micah. After several signals of ghost presence, they decided to set up a camera in their bedroom to record what happened when they slept.
This movie was originally intended to be an independent feature, but was acquired by Paramount Pictures and became a nationwide and worldwide seen film.
Also, it was made in only ten days!
The ending we see in the film is not the same as the original ending; in fact, it was modified by Paramount when the film was acquired.
Here is the trailer of the movie, and the reactions of the audience when Paranormal Activity was released.