On an ocean liner approaching New York, a man tries unsuccessfully to steal a small package hidden in a woman’s stateroom. The woman, fearing that there will be another attempt to steal the package, hides the package in the baggage of Charlie Chan and his son Lee who are staying in the stateroom next to hers.
In New York, newspaper reporter Speed Patten slips into a cab with the woman, whom he knows as Billie Bronson, who, one year ago, had disappeared from New York. She promises to meet him at her hotel at midnight if he will keep quiet about her return to New York. As Speed reports the potential story to his editor, Murdock, the latter receives a phone call from Bronson who demands twice the amount that the editor had been willing to pay a year ago for important information that she had. He agrees to meet with her that night at 10:30.
Billie bribes a bellhop for a key to Chan’s room. As she it attempting to enter, she is spotted by Lee. Claiming that she had mistaken Charlie and Lee Chan’s room for her own, a suspicious Lee later follows her to the Hottentot Club, owned by racketeer Johnny Burke.
At the club, mobster Buzz Moran warns Billie to get out of town before morning, after which she goes to Burke’s office. Meanwhile, Speed, who has come to the club with photographer Joan Wendall, follows Burke to meet Billie. Billie accuses Burke, her former lover, of giving her the runaround because of his involvement with Marie Collins, a dancer at the Hottentot Club, and pulls a gun on him as Marie opens the door.
Later, during a police banquet that is being given in honor of Charlie Chan, Inspector Nelson gets word that Billie Bronson has been murdered at the Hottentot Club and that Lee Chan is being held as a suspect. Excusing himself, Chan hurries to the club with Inspector Nelson.
After arriving at the club and assessing the situation, Nelson orders Lee’s release and questions Speed, Burke, Marie, and Joan. In Burke’s office, where the murder occurred, Chan notices that a napkin has been placed over a tray is not present in a photograph that Joan Wendall had taken moments after the murder. Suddenly, Louie, Burke’s “associate,” turns out the lights. During the ensuing scuffle and resulting confusion, Burke escapes. When the lights are turned back on, Chan notes that a key that was plainly visible in Wendall’s photograph is missing. Using a magnifying glass to examine the photographic image more closely, Chan discovers that the missing key belongs to his hotel room.
Quickly, Chan, Lee, and Nelson go to Chan’s hotel room, where they have trouble opening the door, which is blocked by the body of a murdered man. The dead man is the same person who had tried to steal the package from Billie Bronson on the boat. Marie Collins then enters the room and is shocked to see the body of her estranged husband Thomas Mitchell. On the floor, Chan finds a crumpled page from a diary, which, he realizes, Mitchell was after.
Suddenly Lee remembers something. He tells Chan that Bronson had earlier told him that her room was directly above theirs on the next floor. Upon hearing this, Chan and Nelson hurry upstairs to Billie’s room where they find Murdock. Murdock explains that he was there to buy Bronson’s diary which, he says, contains incriminating information regarding individuals involved in corruption and racketeering in New York City.
The next day, with the city’s newspapers ablaze with the news of the murders the night before, Burke is confronted by Buzz Moran. Burke knocks Moran to the floor. As Burke runs from the room, Moran fires a shot at him, but misses. Deciding to turn himself in, Burke, accompanied by his lawyer, Meeker, goes to police headquarters. There, he is given a paraffin test whether there are any traces of gunpowder on his hands. The test proves to be negative, and Burke is released. Chan reminds Nelson that the missing napkin may have been used to cover the gun, warning Burke that he is still under investigation.
Burke, returning to his office and finding Lee there trying to reconstruct the murder with Ling Tse, an employee of the Hottentot Club, punches Lee, giving him a black eye. Lee hits him back, before being thrown out of the club. Fearing that Charlie Chan has sent his son Lee to snoop around his office, Burke decides to leave town, but is caught at the airport along with Marie. He is taken back to his office where Murdock and Moran are also brought.
Chan, Lee, Speed, Joan, and Nelson also arrive at Burke’s office above the Hottentot Club, where Chan reveals that Mitchell was trying to get Billie Bronson’s diary and use information contained within its pages to ruin Burke who had stolen his wife. Telling Murdock that the police have been monitoring his mail and that they know he has received a special delivery letter, Nelson forces the editor to hand it over. When the envelope is opened, a page of the missing diary is found inside stating that Speed Patten had used his newspaper job as a cover for blackmailing. Outraged, Speed states that the page is an obvious phony. At this point, Chan accuses him of murder, explaining that only the person who had the actual diary – the murderer – could tell that the page in the envelope was a forgery. Chan then relates that he had first suspected Patten when his newspaper account of the Bronson murder had noted that Billie was shot in the back, a fact that had only been known by the police and the murderer. The detective then reveals that he and Inspector Nelson had sent the phony diary page to Murdock in order to draw Speed out.
Speed Patten pulls out a gun and confesses that he killed Billie Bronson because she was going to go to the district attorney with the diary, which implicated him. He then found Mitchell with the diary and killed him. As Patten is about to shoot Chan, Lee jumps him, and in the struggle, Speed is disarmed and captured.
Later, while Chan, Lee, and Inspector Nelson are riding in a car together through the streets of New York, Nelson invites the father and son to be his guests and see the city. As an enthusiastic Lee takes off his sunglasses, revealing that he now has two black eyes, Charlie Chan says, “Evidently, Broadway very hard on eyes.”