Martin Harvey (Martin Short) is a middle-aged office worker who lives in Chicago with his wife, Katherine, their 16-year-old daughter, Caroline, and 11-year-old son, Ben. When he learns his recently deceased uncle has bequeathed him a 60' yacht once owned by Clark Gable, he decides to take his family to the island of St. Pomme de Terre ("Saint Potato") to retrieve it so he can sell it. Katherine resists the idea, but agrees after Caroline announces she has just gotten engaged.When the Harveys arrive at the island, they discover that the yacht, the Wanderer, is in terrible condition. Upon hearing this, the yacht broker cancels his plan to send an experienced captain to help them sail it to Miami, and instead hires a local sailor, Captain Ron Rico (Kurt Russell), a one-eyed man with a very laid back attitude, and Navy veteran who claims to have piloted the USS Saratoga. He launches immediately when he sees the car he arrived in roll off the dock and sink. Its owner arrives at the dock and shoots at him.Captain Ron takes Ben's money in a game of Monopoly, giving him beer to drink and charging him for it later, but shows loyalty to Martin, who he refers to as "Boss". Martin, who doesn't like him, calls him "Moron" in his diary, and believes that he doesn't know what he's doing.The Harveys decide to stop off in the Caribbean, but learn that Captain Ron doesn't know how to navigate. While on a random island, Martin decides to go on a nature hike, but runs into a small band of Latin American guerrillas led by General Armando. Captain Ron bargains for Martin's freedom by giving them a lift to the next island, and receiving some firearms in return to fight off pirates. This angers Martin, as he declares there will be no firearms on his yacht and tosses them overboard, before realizing that without them, he is going to have to give the guerrillas a lift.In the yacht's cabin, Katherine shows Martin the initials of Clark Gable and Carole Lombard marked on the bedpost. They are so excited that they share their feelings and have passionate sex.When they arrive at their next destination, San Juan, Puerto Rico, Martin and Katherine are arrested for smuggling the guerrillas to the island. Caroline and Ben party with the locals and Captain Ron, which ends with Caroline getting a tattoo, Ben breaking his glasses, and Captain Ron losing his glass eye. Martin and Katherine are released from jail, but forced to leave that night. Martin decides to leave Captain Ron behind and they encounter pirates who steal the yacht, and are stuck floating in a raft.They land in Cuba and discover the yacht there. The pirates find them, but with the help of Captain Ron, they are able to escape with the yacht. Captain Ron learns that they underrate Martin, and he decides to play hurt, forcing Martin to take control of the escape. Using the skills that Captain Ron taught them, they are able to get the sails up after the engine breaks from lack of oil to distance themselves from the pirates. The United States Coast Guard fires once at the pirates, scaring them away and creates a safe passage to Miami.They arrive in Miami and part ways with Captain Ron. As they sail to their destination, they decide to turn the yacht around and keep it. In the final scene, Captain Ron (now cleaned up with his hair pulled back and wearing a suit) appears and is now employed by a wealthy couple in a small motorboat. He tells them they should take it out for a spin.