When I think about what creates an atmosphere in a horror movie, I think about a combination of the lighting, setting, score, and overall tone of the film. Me? I love an old fashioned, gothic horror atmosphere that invokes a nightmarish mood of otherworldliness. For me the following films ooze with horror:
1. Suspiria - Not only does Goblin's nerve-jangling score keep you on edge, Argento's signature lighting and purposeful design of the dance academy give it the feel of a satanic fairytale.
2. Night of the Living Dead - Romero picked just the right creaky old stock music to accompany his groundbreaking zombie epic's starkly frightening black and white photography. This film permeates the room with an overwhelming sense of doom and fear every time I watch it.
3. City of the Living Dead/The Beyond/House by the Cemetery: Fulci's loosely related unholy trilogy of Lovecraftian zombie horror are perfect examples of how important sound design is in making the viewer uneasy, as each of these films practically groan with howling wind and the putridly GROSS sounds of rending flesh. You can practically SMELL the blood and reek of decay wafting from your TV screen. Additionally, his non-linear narratives add to the dizzying, nightmarish effects these films seem to have. It's too bad his later films seem to have lost all these traits.
4. The Blind Dead Series (Tombs of the Blind Dead, Return of the Evil Dead, Ghost Galleon, Night of the Seagulls): de Ossorio's Blind Dead films benefit from that oppressive, demonic chanting and the unforgettable image of his blind Templar vampire-zombies SLLLOOOOWWWWLLLY climbing from their tombs, galloping ghost-like through towns, down beaches, and across fields, then shuffling to find their victims by sound all in simple slow motion. Though the films vary in quality (the 1st & 4th being my favorites), just the way the Templars are filmed going about their business make each film worth watching just to soak up the spectral atmosphere.