Shyamalan achieved commercial success in 1999 when he wrote and directed The Sixth Sense, a supernatural drama about a psychologist (Bruce Willis) who blames himself for a patient's suicide and his own broken marriage. Upon meeting a disturbed child (Haley Joel Osment) who claims to see people who have died, the psychologist feels he has a chance to redeem himself. According to the book DisneyWar, David Vogel of The Walt Disney Company read Shyamalan's script and, without obtaining approval from his superiors, bought the rights to it for a high $2 million and allowed Shyamalan to direct. Vogel's bosses, disagreeing with his decision, sold the profits to Spyglass Entertainment and kept only a 12.5 percent distribution fee for itself.

The film had a $40-million budget, and grossed over $600 million at the box office worldwide.

The Sixth Sense was nominated for six Academy Awards, including Best Editing, Best Supporting Actor for Osment, Best Supporting Actress for Toni Collette, Best Director, Best Picture, and Best Original Screenplay. The Science Fiction and Fantasy Writers of America awarded it a Nebula Award for Best Script of 1999.