On the night before his sailing ship, the Suva Star is to leave for Cocos Island on a treasure hunt, Captain Kane discusses the journey’s sponsor, Miss Patience Nodbury, with Steve Daniels, who had helped to arrange the trip.
Charlie Chan, searching for his son, Jimmy, who is attempting to stow away in search of adventure, arrives. He meets Miss Nodbury who explains that she tore the treasure map, drawn by her pirate grandfather, Matthew Nodbury, known as Black Hook, into four pieces, and gave three of them to other passengers, adding that someone has tried to steal her portion of the map, causing her to delay the start of the trip. She goes on to tell Chan that Black Hook, who had a peg leg and a hook, appears to each Nodbury as they are about to die.
Later, as Miss Nodbury retires to her cabin, she hears the approaching tap of Black Hook’s peg leg and then the scratching of his hook upon her door. As the elderly woman opens the door, she sees her ancestor and dies of a heart attack. As Miss Nodbury lies dead on the floor, the pirate’s hook snatches up her piece of the treasure map.
Meanwhile, the ship’s passengers, claiming that they have received a mysterious message from Steve Daniels, arrive and are introduced to Chan. They include Bill Lydig, a journalist about whom Chan is curious because he had heard that Lydig was dead, collector of rare coins Jed Thomasson, typist Kate Ransome, and newlyweds Charles and Laura Thursday.
Kate discovers Miss Nodbury’s body, after which Chan finds part of a Black Hook disguise that someone had worn to frighten the old woman to death.
When Chan sends Jimmy ashore to call the police, the youngster overhears a suspicious conversation between Dr. Anne Bonney, a psychoanalyst, and her patient, Gene La Farge, who are both passengers aboard the Suva Star.
Back on the ship, La Farge admits that he had seen Miss Nodbury’s body, but he denies that he had anything to do with her death. Laura Thursday and Jed Thomasson give their pieces of the treasure map to Chan for safekeeping, after which Jimmy finds the rest of the pirate disguise as well as another portion of the map in Steve Daniels’ cabin. Steve protests that he is being framed, and it is then discovered that the two pieces of the map in Chan’s possession have been stolen. The group then finds Kate, who had fainted after reading in a magazine that Lydig is really an escaped murderer. Before Lydig can be questioned, however, he is found dead of suffocation inside of a diving bell below deck.
Chan then goes ashore to find Captain Kane, who states that he has not met any of the passengers yet. When Chan questions the captain about his strange behavior, Kane explains that many years ago, he had gone on a treasure hunt to Cocos Island with a partner, but that the man had stranded him there, leaving him to die. Believing that this former partner would not be able to resist returning to the island to seek out the treasure, Kane had arranged for and publicized the journey so that he could find and kill the man who had tried to kill him.
After Chan calls the police, Inspector Vesey arrives and arrests Daniels because of the circumstantial evidence against him. Chan, who has the map piece that was found in Daniels’ cabin, uses himself as bait to catch the killer. Chan, accompanied on the dock by La Farge, is stalked by the person who is dressed as Black Hook. Jimmy, who was supposed to signal his pop at the approach of danger, has difficulty doing so, as he has fallen into the water.
Confronted by the killer, Chan unmasks him, revealing the face of Jed Thomasson, who explains that it was Lydig who had stolen the pieces of the map from Chan, and that he had killed him to get them. As Thomasson is about to kill the detective and La Farge, he is overcome by Captain Kane who reveals that it was Thomasson who had been his partner who had left him for dead on Cocos Island. Inspector Vesey and the police arrive, arresting Thomasson and taking him away.
The film ends with Jimmy once again falling into the bay as he had throughout the picture. An amused Charlie Chan tells his number two son, “Honolulu directly west.”