Denis Nayland Smith observes as Fu Manchu is executed in China for crimes against humanity. Back in London, Smith becomes convinced that a recent spate of crimes involving drugs and Orientals must be the work of just one mastermind. In London's Limehouse district, Professor Muller arrives at a graveyard for a meeting, accompanied by his driver. Fu Manchu emerges from the shadows and reminds the professor that he was supposed to come alone. The driver is killed and the professor is taken prisoner.

The driver is found strangled with a Tibetan scarf, so Smith decides to see the body at the morgue. As he is leaving he meets Carl Jannsen, another one of Muller's associates. Jannsen claims not to know where Muller is, but Smith is not convinced. Muller's daughter Maria receives a message telling her not to speak of her father's whereabouts. Smith breaks in to Muller's house and is caught by Jannsen. Maria admits to Smith that Muller was looking for supplies of seeds from the Black Hill poppy - which is only found in Tibet - and that Fu Manchu had promised to deliver. The poppy can be used to create the most deadly poison in the world, but only if kept below freezing. The poppy was first available from Hanumon, but when he said his supply was depleted, Muller was forced to go to Fu Manchu for more. Jannsen and Smith go to see Hanumon, who tries to kill them. The two are able to get away and as they leave Smith realises that the secretary is in fact Lin Tang, Fu Manchu's daughter.

Smith discovers that the man executed in China was not Fu Manchu but a double. Jannsen is kidnapped by Hanumon and Maria is kidnapped by Lin Tang. One of Fu Manchu's servants tries to help Muller escape but she is caught and killed. Fu Manchu dumps her body in the Thames and threatens to do the same to Maria if Muller doesn't agree to make the gas and hand it over. Muller capitulates and agrees to help, but says that to complete his experiments he will need information only available from Professor Gaskell at the Museum of Oriental Studies. Jannsen overhears Hanumon organising to steal Gaskell's documents and escapes.

At the museum, Smith and Jannsen fight off Fu Manchu's men but discover that the papers were taken home by Gaskell the night before. Lin Tang, disguised as an elderly woman, overhears them and quickly drives away from the museum with Fu Manchu. Smith chases them in his car but is eventually stopped when Fu Manchu orders one of his planes to drop a bomb in front of the car. Fu Manchu hypnotises Gaskell and turns him to his side.

The poison is completed with Gaskell's help. Given the news that the Essex marshes will be several degrees below zero, Fu Manchu interrupts British radio broadcasting and warns the nation to expect a demonstration of his power at the village of Fleetwick. The army is sent there, but Fu Manchu releases the poison from his plane and kills all 3000 of the inhabitants. Smith realises that Fu Manchu must be operating near the Thames and discovers that there is a tunnel beneath Hanumon's warehouse near the river. Fu Manchu threatens to kill another 10,000 people if his demands are not met.

Smith and Jannsen infiltrate Fu Manchu's lair but are captured trying to release Muller and Maria. In an ensuing gunfight, Fu Manchu escapes with Muller under cover of fog . Fu Manchu goes to Tibet to gather more of the poppy seeds from the Lama. Smith and Jannsen follow him there and infiltrate the monastery. They overcome Fu Manchu's guards and rescue Muller. Smith leaves behind a gigantic bomb hidden in a chest full of the poppy seeds. Smith and the others escape just before the bomb is due to go off. Fu Manchu realises what has happened, but too late to stop the bomb, which explodes, destroying the monastery. As Smith leaves Fu Manchu's voice can be heard promising to return.