Federal agent Gene Autry and his men are sent to Mexico, where they are to contact the American Consulate for further instructions. At the fiesta, Gene has his heart stolen by the beautiful Señorita Dolores Mendoza. Soon after, he meets with the American Consul, who informs him that Dolores' brother Andreo is the pawn of a gang of foreign agents operating on the island of Palmero with the objective of establishing an enemy submarine base that would put an end to Pan American neutrality. The Consul orders Gene to leave for Palermo immediately, using the excuse that he and his men are to help Don Diego Mendoza, Dolores's uncle, with his cattle roundup. Gene and his sidekick Frog arrive to find Don Diego's caballeros in fear of Andreo and his band of revolutionaries. Intercepting a secret code broadcast over the radio, Gene traces the signal to the abandoned oil fields and learns that enemy agents are plotting to gain control of American oil holdings which would enable them to establish a submarine refueling base. Gene cleverly allows an agent to escape and follows him to the office of Saunders, the head of the gang. Before Gene can act, Saunders captures him and then leads his men to drive a convoy of oil trucks to the submarines waiting offshore. Frog comes to Gene's rescue and, with the help of the Mexican army, they commandeer the trucks and arrest Saunders and his gang. The threat of revolution is ended when Andreo is killed while trying to escape, and Gene returns to his sweetheart Dolores only to discover that she has become a nun to atone for her brother's sins.