When Thomas Manning, the second husband of a wealthy socialite, is murdered in his locked study, the police are baffled and the district attorney quickly decides to drop the case. Months later, detective Charlie Chan is passing through town when he is approached by Manning's step- daughter Leah, who asks for help in solving the crime. Chan agrees to review the case, and despite his protests, his college-student son Tommy ignores his studies to help his father. Chan is also aided by cab driver Birmingham Brown who, while terrified of danger, ends up chauffeuring the detective around town. As Leah talks with Chan in his hotel lobby, a man eavesdrops on their conversation. Leah tells Chan that criminologist Dr. Paul Recknik has recently published a book which names her mother as the murderer and accuses police detective Harvey Dennis of covering up the crime because he is in love with Leah. Intrigued, Chan proceeds to a shop to purchase a copy of Recknik's book. Meanwhile, the man in the hotel lobby hurries to a carnival fun house at the end of the pier, where a gang of jewel thieves is headquartered. The man, Kaplan, a member of the gang, reports Chan's activities to twins Carl and Kurt Kazdas. Later, Kurt sneaks out of the hideout to arrange a meeting with Chan. By the time Chan arrives at the fun house, however, he finds Kurt dead, a victim of strangulation. Soon after, Dennis, alerted by Leah, appears at the fun house and identifies Kurt as a fence specializing in stolen gems. After Chan invites Dennis to join the investigation, they search the headquarters and discover several stale loaves of bread with small statues hidden inside. Next, Chan visits Recknik to discuss his book. Noticing that the criminologist wears gloves, Chan comments that Kurt was killed by a pair of gloved hands, prompting Recknik to explain that he must protect his hands because they were severely burned in a fire. From Recknik's, Chan proceeds to the Manning house to examine the scene of the murder and there finds a statue identical to the ones hidden in the loaves of bread. At the house, Chan is confronted by Manning's partner, Webster Deacon, who vehemently objects to the reopening of Manning's murder. After noting that Deacon sports a large diamond on his ring finger, Chan visits the artist who created the statues. When the artist exposes a concealed compartment at the base of the statue, Chan discovers a diamond hidden inside and surmises that it is part of a stolen collection. At the studio, Chan notices the statue of a large cat identical to one found in Manning's study, and asks to see a copy of the sales receipt. The receipt reveals that the statue was sold to the Sea Tide Art Company, which is located at the pier, adjacent to the Fun House. Next, Chan visits Deacon at his office, and when he begins to question him about the Sea Tide Company, Deacon flees out a back door. Jumping into Birmingham's cab, Chan and Tommy pursue Deacon to the pier, but by the time they arrive, they find Deacon, strangled. Chan, Tommy and Birmingham then return to their hotel room, and when Tommy passes out, Chan opens the door and discovers that someone has been pumping deadly gas into the room through the keyhole. Deciding to examine the cat statue, Chan returns to the Manning house and finds another diamond hidden in a secret compartment. At the Fun House, Chan is captured by Carl, Kaplan and Gannet, another gang member, who demand that he produce the diamond. When Tommy and Birgmingham arrive at the Fun House, the thieves begin to pummel Tommy, intending to coerce Chan into revealing the location of the diamond. After Chan convinces the thieves that Birmingham has the jewel, they begin to chase him, and when Tommy collapses to safety under a table, Chan escapes. Dennis then learns that Chan has gone to the Fun House, he follows him there. Meanwhile, Chan and Birmingham lead the thieves into the Fun House maze. After Chan subdues the crooks with a well-aimed spray of the fire extinguisher, Dennis and Leah arrive and Chan elaborates that Manning and Deacon were partners in the diamond theft. When Manning double-crossed the gang and took the diamonds for himself, Deacon killed him. To prove his supposition, Chan produces the murder weapon with the initials "WD" inscribed on the handle. Chan continues that Deacon killed Kurt after discovering that he was about to betray him. Chan then pulls the murder gloves from Kaplan's pocket and concludes that Kaplan killed Deacon to prevent him from leading Chan to the hideout.