The destroyer H.M.S. Ferocious leaves Portsmouth harbour bound for the South Atlantic on a mission to find and sink the German pocket battleship, the Ludendorf.

After docking in Brazil in order to refuel, a group of sailors from the Ferocious are granted some brief shore leave, among whom are three friends, Tommy Taylor, Llewellyn Davis (nicknamed 'the Admiral'), and Johnny Meadows.

While Tommy and Johnny go the Eldorado night club, Llewellyn visits his sister Jane, who is working in Brazil as a governess to the children of Professor and Mrs Pilkington. He finds her in the process of packing her bags, as she and the Pilkingtons are leaving that evening for Britain on the S.S. Savannah.

As there are a few hours to spare before the Savannah is due to leave port, Llewellyn takes Jane to the Eldorado so as to introduce her to his two friends. However, Tommy and Johnny, who are only aware of Jane's appearance from a less than flattering photograph of her sporting pig tails and wearing a school uniform, tell Llewellyn that they do not want to meet that "scraggy woman", a comment Jane happens to overhear.

Surprised at how much older and more attractive she now looks, Tommy and Johnny make their way to the Savannah to see Jane again, to apologise and flirt with her, but neither meets with any success.

While the others are failing to woo Jane, Llewellyn, who has gone to the ship's bar to buy some milk for Digby, the Pilkington's young son, finds himself an unwilling participant in some wedding celebrations. When Tommy and Johnny, having been ejected from Jane's cabin, go to find Llewellyn, they discover him drunk and incapable of moving. While they attempt to rouse him, the Savannah sets sail with all three sailors still aboard.

Finding the pilot's matealso extremely drunk, Tommy and Johnny ask him if they can use the pilot boat to make their way to the Ferocious. But he will only allow this if they agree to have a drink with him, which they do, only to end up drunk themselves.

All three drunken sailors eventually set off in the pilot boat towards what they believe to be the Ferocious, board the ship, make their way below deck, undress (throwing their uniforms out of a convenient porthole) and finally fall asleep in some hammocks. It is only in the morning, when they are awoken by the crew speaking German and see a photograph of Hitler on the wall, that they realise they have boarded the Ludendorf by mistake.

They are taken to the captain, and try to pass themselves off as a Russian (Tommy), an American (Johnny) and a Chinaman (Llewellyn), but their ruse is rumbled and they are locked in a cabin below decks.

Most of the German crew disembark in small boats in order to collect food supplies, and the three sailors, with the aid of Hans Muller, a friendly Austrian crew member, overpower their guard and trick the skeleton crew into abandoning ship. Now in control of the Ludendorf, they set course for home. En route, they encounter another German battleship and accept a group of survivors from the sunken Savannah. Among their number are Jane and the Pilkington family.

However, the battleship comes to a stop due to a leakage of oil and the former crew finally catch up and retake her. The Ferocious, having earlier spotted the Ludendorf (with the swastika on the ship's deck modified to a Union Jack), cautiously draws near, unaware that she is preparing to open fire.

Tommy and the others escape from their captors and attempt, by various means, to disable the Ludendorf's guns, but when Digby fires one of the Ludendorf's remaining working guns as a prank, the Ferocious returns fire. Tommy, with the aid of a make-up mirror from Jane, signals to the British destroyer to stop firing and the Ludendorf finally falls into British hands.

A cinema newsreel item shows the three sailors being feted as heroes upon their return home, with Hans being made a British subject, and Tommy getting married to Jane.