After Indiana Jones (Harrison Ford) survives an assassination attempt by businessman Lao Che in 1935, Indy flees Shanghai aboard a transport plane with Short Round (Ke Huy Quan) and Willie Scott (Kate Chapshaw), unaware that it also belongs to Lao Che.
As a result of another assassination attempt, the group becomes stranded in the small village of Mayapore in northern India.
The villagers ask Indiana Jones for help in recovering their sacred stone, which was stolen from them by the local Thuggee cult.
The search for the stone leads the group underground and into the influence of supernatural forces.