In Melbourne, Australia, at the turn of the twentieth century, American vaudevillians Harold Gridley and George Cochran are forced to flee the music hall in which they are performing when the fathers of two country girls they have romanced threaten them. While George sits comfortably in the dining car of a train, Harold is outside, clinging to the trestle. The fathers are also on the train, and when they spot George, he jumps out the window and lands with Harold in a sheep pasture. Hiding among the animals, the two entertainers eventually end up in Port Darwin, sporting bushy beards, and head for an employment agency. The only job available involves diving for Prince Ken Arok's sunken treasure, work that has already claimed the lives of four men. Desperate, Harold and George accept, and the next morning, the now clean-shaven duo sets sail for Ken Arok's South Sea island, Vatu. Upon arriving there, Harold and George meet Ken Arok's exotic cousin, Princess Lalah MacTavish, whose mother was Vatu and father Scottish. Despite vows to avoid women and stay out of trouble, both Harold and George become infatuated with Lalah. After privately arguing with Ken Arok about using the unsuspecting Americans to dive in waters infested with a giant squid named Boga Ten, Lalah invites her guests to an honorary dinner at the palace. Harold and George are entertained by a troupe of dancers and, in turn, entertain Lalah with a Scottish song and dance. Lalah then shows the Americans a Hindu rope trick, during which they all climb a rope into the clouds, and coaxes a beautiful dancer out of a small basket with a magic flute. Afterward, George and Lalah enjoy a romantic walk together, and Lalah warns him about the squid and Ken Arok's ruthless pursuit of the treasure, which sank with her father's boat years before. Eager to have Lalah for himself, George tricks Harold into volunteering for the next day's dive. While underwater, Harold locates the treasure box but is immediately accosted by Boga Ten. Harold eludes the beast by slipping out of his diving suit, and once he is safely back on board with the treasure, Boga Ten yanks Ken Arok off the boat with one of its tentacles. After the now-rich Lalah, George and Harold set sail for Bali, Lalah admits that she is in love with both of them. Distracted by Lalah's dilemma, Harold lets go of the boat's steering wheel, and the boat strikes a reef and starts to sink. The three seek refuge on the nearest jungle island, where Harold is almost eaten by a crocodile and becomes suspended in an animal trap. That night, while George sleeps in an abandoned hut, Harold proposes to Lalah. Still unsure, Lalah declines to respond and soon is being courted by both George and Harold. Later, while they are all asleep, a curious male gorilla enters the hut, then fights with a tiger lurking outside. The tiger kills the gorilla, and the next day, the gorilla's grieving mate sees Harold and picks him up lovingly. To save Harold, George starts to sing to the ape, but after dropping Harold, the gorilla embraces George. Just then, local warriors shoot darts at the men and the gorilla, causing them to laugh and shake uncontrollably. The natives cart Harold, George and Lalah off to their village and prepare to kill them and shrink their heads. When the medicine man, Bhoma Da, realizes that Lalah is the daughter of his old friend, however, he is persuaded to host a two-groom wedding instead. George and Harold learn separately that they are to marry Lalah and each gloats privately about his victory over the other. As wedding preparations get under way, Lalah is brought before Chief Ramayana, who reveals that he is in cahoots with Ken Arok and has given him the treasure box in exchange for Lalah's hand in marriage. Laughing off Bhoma Da's warnings that the volcano god will spite him, Ramayana orders that George and Harold be wed to each other and have their heads shrunk. Wearing large masks, George and Harold cannot see whom they are marrying and fall unconscious after drinking drugged wine. When they wake later and find themselves in the same bed, they realize what has happened and learn about Lalah's fate from a guard. With only minutes to live, George asks Harold's forgiveness for all the tricks he has played on him, and Harold embraces his friend. At that moment, the volcano starts to erupt, and the villagers run in terror. In the confusion, Harold and George escape, rescue Lalah and grab the treasure box. Upon reaching the beach, George and Harold demand that Lalah choose between them, and she picks George. The dejected Harold then pulls out Lalah's flute and makes Jane Russell emerge from a basket. Russell, however, prefers George and walks off with him and Lalah.