There is a ghost that walks along the Seventeen Mile Drive on foggy nights. She is called the Lady in Lace. People say she is the ghost of Dona Maria del Carmen Barreto, the woman who used to own much of the land on that stretch of the California coast, returned to keep watch over her land. Others disagree. The claim that the white, flowing gown of lace in which the ghost appears resembles a wedding gown. They think that she might be the ghost of a jilted bride who was left standing at the altar.

Travelers encountering the ghost of the Lady in Lace as they drive down the Seventeen Mile Drive on foggy nights say that she looks very sad and lonely, as if she were about to cry. They see her walking slowly along the road, her shoulders drooping a bit as if she were carrying a heavy burden of grief or pain. When they draw close to her, she disappears.

One night, a courting couple went out to sit on the rocks at Pescadero Point overlooking the sea. It was a bright night, and they were whispering together and watching the moonlight sparkle on the water when the Lady in Lace appeared right before there eyes. As they watched in astonishment and fear, she walked passed them, her form glowing in the moonlight. Slowly, her face set and sad, she wandered down to the beach. Then she vanished into thin air. Needless to say, that was the last time that couple went courting at Pescadero Point!