KeyFace is a demon introduced in prequel/sequel Saw, where two men are locked in a bathroom and forced to play a vicious life or death game for an unseen psychopath. Unlike the sequels which placed an emphasis on the gore and traps, the first movie was more of a tense thriller with a couple of creatively gruesome setpieces. Saw was originally conceived as a straight to video effort, but early buzz saw it receive a theatrical release and become a franchise spawning success.
Wan and Whannell followed up with Dead Silence, which was more of an atmospheric ghost story but failed to find an audience. While Wan opted out of directing Saw 2, Whannell would write Saw 2 and 3. Wan would later try to break away from horror with 2007's Death Sentence, which was based on the sequel novel to Death Wish. This vigilante thriller found Kevin Bacon as a family man whose life is torn apart when he seeks revenge for his son's death. Despite good reviews, it was another financial disappointment.
This spurred Wan and Whannell to create a new, low-budget horror movie with Insidious: Chapter 3 while Adam Robitel helmed Insidious: The Last Key.
The timeline of the Insidious franchise is convoluted, with both the third and fourth movies being set before the events of the first. The latter movies follow demonologist Elise (Lin Shaye, Grudge) - who died in the original - with Insidious: The Last Key diving further into her family history. When she young she was haunted by a demon known as KeyFace, who tricked her into unlocking a door it was trapped behind. Once through, it made her kill her mother and later used her father Gerald to kidnap and murder several women.
Decades later, Elise is forced to confront this creature once more to save her niece. This demon has keys for fingers, which can be inserted into a victim's neck to "silence" their screams or lock them in a prison located in The Further. The finale of Insidious: The Last Key finds Elise pulled into this prison, where her father's spirit is still trapped. During a fight, KeyFace almost locks her spirit away, but she manages to get her brother's old whistle - which was given by his mother to call her for help when they were children - and blow it. The spirit of Elise's mother then appears and banishes the creature. KeyFace was played by Javier Botet (IT) and while its exact origin isn't clear, it appears to have manifested somewhat from Elise's abusive father, who also worked in a prison and it feeds off people's fear and hatred.