In Southern Asia during a United Nations peace mission, a revolution breaks out, forcing British diplomat Richard Conway to evacuate his countrymen, as well as some American citizens, via the Baskula airport. As the guerrillas draw near, several planes are commandeered to rescue the Westerners. After most of the refugees are safe, Richard boards the last plane, a DC-3, that has been ordered to fly to Hong Kong. His companions on the flight include his brother George, an ambitious reporter covering the peace negotiations for the London Express ; Sally Hughes, a disillusioned photojournalist working for Newsweek ; Sam Cornelius, an engineer and businessman who is mysteriously reticent about his work; and Harry Lovett, a comedian inadvertently separated from his United Service Organization troupe. Before they take off, unknown to the group, a burly Asian man renders the pilot unconscious and takes his place in the cockpit. The passengers do not realize they have been hijacked until the position of the morning sun indicates they are flying in the wrong direction. After a refueling stop in an isolated desert area served by armed men, the plane resumes its course, flying high into the mountains. Suddenly, the plane malfunctions and during the crash landing in a desolate mountainous region, the pilot is killed. Incommunicado and in the midst of a storm, the passengers make due with emergency provisions. To their relief, a procession treks down the mountain, led by Oxford-educated Chang, who offers to take them to their lamasery. Chang leads the Westerners up the mountain and over bridges spanning deep crevices, until they reach a mountain pass that marks a cave. Through the cave is the entrance to Shangri-La, a community nestled in the Valley of the Blue Moon. In the serene paradise, a strange climate phenomenon created by the mountains keeps the area sunny and mild. After introducing them to Brother To-Lenn, Chang reports alone to a mysterious old man to inform him that Richard has arrived as planned. Later at dinner, Chang explains to the group that the mountains protecting Shangri-La also block communication and that their only connection to the outside world is through porters who visit irregularly every few years. Richard immediately feels at ease in this place, but the others are burdened with the troubles of their former lives. Sally, who is tormented by the images of war and inhumanity she has photographed, considers suicide, but is interrupted by the timely intervention of Chang and To-Lenn. Although Harry is aware of the superficiality of his life, he looks forward to resuming it, but Sam, who is unhappy yet less eager to leave, points out that getting back from such a remote place will not be easy or safe. George is the most restless, despite his romance with Maria, a youthful looking woman who resides there. The Westerners soon learn that the community values knowledge and art. Chang shows special interest in Richard, explaining that the philosophy governing Shangri-La is that of moderation, and that mutual courtesy creates harmony. Due to their healthful lifestyles and nurturing surroundings, he asserts, the inhabitants are long-lived and never sick. As days go by, all except for George become increasingly content. As To-Lenn listens patiently, Sally unburdens her thoughts and begins to feel happiness. She befriends Sam, who confides that he was involved in a major corporate scandal years ago and took refuge in an anonymous life in Baskula. When Sam discovers gold in Shangri-La, his first thoughts are how to enrich himself, but then he notices how the women must carry their water in buckets and devotes himself to engineering an irrigation system to lighten their load. Richard falls in love with schoolteacher Catherine, and his feelings are reciprocated. When asked to take over Catherine’s class for a day, Harry discovers a hidden talent for teaching and later asks Chang if he may start a drama class. Only George is anxious to leave, and his agitation causes Maria to feel restless, despite Sally’s assurances that life is better in Shangri-La. When Richard begins to suspect their arrival was not accidental, Chang takes him to meet the elderly High Lama, who reveals he is actually the Belgian priest who founded the order in Shangri-La in 1747 and has lived over two hundred years due to the life-giving surroundings. Predicting that civilization is heading toward self-destruction, the elder has arranged for the lamasery to preserve humanity’s intellectual treasures, in the hope that Shangri-La will lead the way in rebuilding the world into a better place filled with brotherly love. When porters arrive, providing an opportunity to return to the outside world, only George wishes to leave and Maria agrees to accompany him. Richard warns him that, according to Chang, Maria is actually many decades older than she looks and would regain the appearance of her true age if she left Shangri-La. George, however, argues that everything Richard has been told is a lie. Upon returning to talk to the High Lama, Richard learns that the elderly man is aware that his death is near and that he has long been acquainted with Richard’s philosophical writings. The High Lama admits that Richard was brought to this place, in the hope that he would agree to succeed the old man. Honored, Richard accepts, just as the man dies. Later, to prove that Richard has been misled, George asks Maria to tell Richard what she told him, that she is only twenty and was kidnapped two years ago by the lamas. Troubled by this testimony and concerned about George travelling alone, Richard decides to leave. Because the High Lama’s funeral is in progress and the porters are impatient to depart, Richard is unable to say goodbye to Catherine, but Chang predicts that he will return. The journey down the mountain is difficult for Maria and the porters, who soon leave their charges behind and are killed in an avalanche. Richard carries Maria to a cave to rest, and there the brothers discover she has aged and died. Shocked and devastated, George runs from the cave and falls over an icy cliff. Lost, Richard wanders and is eventually rescued, snowblind and starving, and taken to a hospital. As Richard recovers, he tells of his adventure to the doctor, who later admits how much he wants to believe the story. Before Richard can be transferred to England, he mysteriously departs. Travelling alone, Richard eventually finds the mountain pass and the pole marking the cave entrance to Shangri-La.