After the winds throw his ship off course, Capt. Sinbad dares to drop anchor off the mysterious Island of Colossa. In the morning, Sinbad leads his fiancée, Princess Parisa; Harufa, his second-in-command; and the rest of his crew to the island where they find giant cloven footprints in the sand. As they approach a cave fronted by a massive stone mask, a one-eyed monster known as a Cyclops chases the magician Sokurah out of the mouth of the cave. When the Cyclops attacks Sinbad and his crew, Sokurah summons The Genie from his magic lamp and orders him to erect a barrier to protect them. Unable to penetrate the barrier, the Cyclops angrily watches as the men row away in their boat, then hurls a boulder over the barrier. The resulting wave capsizes the boat, spilling its occupants and the lamp into the water. As Sinbad and the others reach the safety of their ship, the Cyclops pulls the lamp from the sea, infuriating Sokurah, who insists upon returning to retrieve the vessel. Sinbad refuses, stating that he is on an important mission of which peace hangs in the balance. Upon reaching Bagdad, Sinbad is greeted by the Caliph, who regards Sinbad as his son. In one week’s time, Sinbad is to marry Parisa, the daughter of a Sultan, and thus cement peaceful relations between their countries. When Sokurah performs at a feast on the eve of the wedding, the Sultan is so impressed that he asks the magician to prophesize the future. The magician foretells war and disaster in Bagdad, then offers to disperse the evil powers in return for a ship and a crew to sail back to Colossa. Furious, the Caliph banishes Sokurah from the city. That night, while Parisa sleeps, Sokurah slips into her chambers and casts a spell that causes her to shrink. In the morning, when Sinbad discovers his now lilliputian princess, he promises to take Sokurah to Colossa if the magician will restore his bride to normal size. Aware that most sailors would consider the mission too dangerous, Sinbad recruits a crew from the prison yard. As they sail the unchartered waters, the criminals plan a mutiny against Sinbad and his loyal band of followers. Just as Sinbad hides the princess in a tiny chest to protect her, the men mutiny. When the mutineers threaten to kill Sokurah, Sinbad surrenders, after which the rebels sentence them to die at dawn. That night, Sokurah tells Sinbad that high winds and strong currents will drive the ship toward the island of screaming demons, and that all within earshot will be driven mad by the hideous screams. After Sinbad and his party stuff rags in their ears to block the screams, Sokurah’s prophecy comes true as the others are driven mad. Sinbad seizes the wheel just in time to steer the ship safely through the reef and back to the island of Colossa. As they set up an immense crossbow with which to slay the Cyclops, Sokurah suggests the group split into two for the perilous trek across the Valley of the Cyclops. Sinbad’s group finds treasure hidden in the Cyclops’ cave and wants to abandon their mission and make off with the riches. As Sinbad argues with them, a Cyclops appears, plucks up the men and tosses them into a cage. Meanwhile, Sokurah’s men gorge themselves in a pool of wine while the magician goes in search of the lamp. When the Cyclops ties Harufa onto a spit, intending to roast him for dinner, the desperate Sinbad pulls the chest containing the princess from his pocket and asks her to open the latch at the top of the cage. Once the princess slips the latch, Sinbad and his men climb out of the cage and free Harufa. In the cave, Sokurah seizes the lamp and is then chased by a Cyclops. The drunken men confront the beast, who summarily crushes them. After Sokurah and Sinbad take cover in the rocks, Sinbad thrusts his burning torch into the beast’s eye, blinding it. Sinbad then lures the Cyclops to the edge of a cliff, from which it plunges to its death. Distrustful of Sokurah, Sinbad refuses to relinquish the lamp. Needing a shell from an egg of the colossal two-headed Roc bird to complete the potion that will restore Parisa, Sokurah leads the remaining men up to the nesting place of the Rocs. When two of the men find a giant egg, they hungrily crack it open and kill the squawking hatchling. After procuring a fragment of the shell, the men head for Sokurah’s cave at the edge of the Cyclops’ domain. To discover how to invoke the power of the lamp, Parisa climbs down inside to talk to the genie and discovers that the boyish genie is desperately unhappy because he longs to be free. After the genie shows her a cryptic message about fiery rocks inscribed on the side of the lamp and tells her that his real name is Baronni, Parisa promises to help free him if he will tell her the invocation to call forth his protective powers. Once outside the lamp, Parisa repeats the incantation to Sinbad. At that moment, an angry Roc bird attacks and knocks the lamp out of Sinbad’s hands. As Harufa and Sokurah struggle for possession of the lamp, Sokurah kills Harufa, who tosses the lamp to Sinbad before he dies. After the bird snatches Sinbad in his beak and drops him, unconscious, in its nest, Sokurah imprisons the princess in his cave. Upon awakening, Sinbad summons the genie, who tells him that Parisa is being held prisoner at Sokurah’s cave. After restraining the fire-breathing dragon that guards the cave, Sinbad slips inside and orders Sokurah to restore the princess to normal size. Although Sokurah complies, Sinbad refuses to relinquish the lamp until he reaches the safety of his ship. Furious, Sokurah raises a skeleton from the dead and orders it to kill Sinbad. After Sinbad vanquishes the skeleton in a duel, he flees with the princess. Sokurah then invokes a spell to destroy the stone bridge that spans a river of fiery rock, thus blocking their escape. The princess summons the genie, who gives them a length of rope to bridge the gap. As they swing across the river, the princess recalls the inscription inside the lamp and casts the lamp into the river to free the genie. When the Cyclops attacks them at the opening of the cave, Sinbad releases the dragon to combat it. After the dragon slays the Cyclops, Sokurah goads it to kill Sinbad. Racing to his camp, Sinbad orders his men to launch the crossbow. Felled by the arrow, the beast collapses and crushes Sokurah. After Sinbad and his ship sail away from Colossa, Parisa says the name “Baronni,” after which the genie, now transformed into a cabin boy, appears.