For me, it's the original Resident Evil. While many of its sequels are great games as well, the first one always stands out for me.
I remember playing RE1 for the first time in 1996 at a friend's (I didn't have a PS1) in his parents basement at all hours of the night as an 11-year-old kid and it freaked me the hell out. The first zombie encounter when he turns to look at you while chewing on that dude, zombie dogs jumping through windows, the giant snake, the first hunter encounter, when Tyrant bursts through the floor, the list goes on.
I had an N64 at that time, and because of that one game, I wanted a PS1. I never got one, but later on in life I had the GameCube, and I got to own the Resident Evil remake which was also amazing. The freaky bitch in chains they added that just wouldn't die made me quiver every time she lumbered towards me.
So what do you think the scariest game is, and why?