The Cabinet of Dr. Caligari - Robert Wiene
Is it really the first ever horror film? Not really. Robert Wiene (the director of this film) years earlier directed a film titled "Fear". Said film also shares the lead actor from The Cabinet of Dr. Caligari. But, in reality, the first ever horror movie is the 1896 short "The Haunted Castle". An extremely corny short with plastic bats, sheet ghosts and incredibly energetic cartoonish devil.
I digress. The Cabinet of Dr. Caligari is still a great film despite not being the first of its genre. The style is unique and bizarre, being that it was a part of the German Expressionist Movement (other films include Nosferatu, The Student of Prague and The Golem). It's funny though that in reality the main reason why they used the warped and distorted backdrops was because of the fact that they couldn't afford enough stage lights.
Aside from that, I view this in a way as one of the earlier zombie films. The reason why I say that is because of this: there are so-called zombies in Haitian mythology, what they are in reality though are people under the influence of a mind altering drug. The villain Cesare shares some similarities with the Haitian zombie myth, the main similarity being that a zombie follows the commands of a wizard/priest (Caligari).