Chan investigates illegally sold Egyptian treasures and solves a double murder by the man who took over the victim's project.
Archaeologist professor Arnold opens a tomb, and Ali dies. Charlie Chan (Warner Oland) arrives to investigate for a Paris museum. Snowshoes (Stepin Fetchit) believes his ancestors are there. Carol Arnold (Pat Paterson) says her father is missing. Chan asks professor John Thurston (Frank Conroy) about treasures from the Ameti tomb that have been sold in Europe in violation of their contract. Thurston shows Chan Ameti treasures, and Chan notices the mummy has been opened. They x-ray it, and Chan sees a bullet near the heart. Professor Arnold's body is found in the mummy case. Thurston gives Carol medicine from Dr. Racine. Carol believes she saw a ghost, and her injured brother Barry Arnold (James Eagles) is angry and frightened by the legendary curses. Dr. Racine (Jameson Thomas) comes to see Carol. Thurston admits he sold Ameti items to pay Dr. Racine and says professor Arnold was wounded by natives, the bullet not being removed. Chan asks him for Arnold's last letter.
Chan stays with Tom Evans (Thomas Beck) and uses his typewriter, discovering the murderer used that machine to forge the Arnold letter. Tom tells Chan that professor Arnold was still looking for the real Ameti treasure. Tom and Chan go to the tomb with Snowshoes. The lights go out, and Snowshoes is scared by the statue of Sekhmet that disappears.
In Luxor Chan asks a druggist about mapuchari and then meets the police inspector. Dr. Racine says a blow on the head caused Arnold's death. Carol is worried about Barry. Chan found mapuchari in cigarettes and believes it affected Carol. Barry, who knows where the treasure is, collapses while playing the violin and dies. Edfu Ahmad, who provides the cigarettes, pulls a gun and escapes.
Chan and Tom go back to the tomb and discover a secret passage. Tom swims underwater and finds a room with treasures and Arnold's clothes; but he is shot twice. A doctor removes the bullet, which Chan takes to compare it to the one he got from the professor's mummy. Chan tells the well-wishing servant Nayda (Rita Hayworth), "Kind thoughts add favorable weight in balance of life and death." Chan plays Barry's violin and discovers a tiny vial of poison inside it. He shows how the violin sound could break fragile glass. Chan says that when Tom becomes conscious, he will name the murderer. The police try to arrest Edfu Ahmad. Carol is told to leave Tom in order to rest, and Chan catches Thurston about to stick a knife into Tom. Chan tells the police that Thurston killed professor Arnold, drugged Carol, poisoned Barry, and shot Tom. Tom awakes to find a doting Carol.
Chan's detecting wisdom proves that modern greed, not ancient Egyptian curses, caused death and drugged hysteria.