In the early 16th century, a young boy helplessly watches his father's death at the hands of Kabai Sengh, the ruthless leader of the Sengh Brotherhood who attacked their ship. The boy jumps overboard and is washed ashore on an island called Bengalla, where he is found by local tribesmen, who take him to their village. There he is given the Skull Ring, swears to devote his life to the destruction of piracy, greed, cruelty and injustice, and as an adult adopts the identity of "The Phantom", a masked avenger. The mantle of the Phantom was passed down from father to son through four hundred years, leading people to believe in a single, immortal figure.In 1938, Kit Walker (Billy Zane), the Phantom's descendant, finds a man named Quill (James Remar) leading a mercenary group in the jungle. The group is searching for one of the Skulls of Touganda, which grants its owner a tremendously destructive power. The Phantom saves the native boy they have kidnapped to be their guide and captures Quill's men, leading them to be picked by the Jungle Patrol. Revealed as a member of the Sengh Brotherhood and the man who killed Kit's father (Patrick McGoohan), whose ghost frequently appears to Kit to give him advice, Quill escapes with the Skull and returns to the United States.In New York City, Kit's former girlfriend from college, Diana Palmer (Kristy Swanson), is a frequent traveler whose uncle, Dave Palmer (Bill Smitrovich), is the famous owner of the World Tribune newspaper. The newspaper has been investigating power-hungry business magnate Xander Drax (Treat Williams), a shady character with a reputation for dealings with criminals. Palmer has managed to uncover that Drax is connected to a mysterious spider web symbol, which he traces back to the Bengalla Jungle. He sends Diana to investigate, but makes the mistake of informing New York's corrupt police commissioner, who is allied with Drax, of Diana's trip. The airplane is hijacked by Drax's female air pirates led by Sala (Catherine Zeta-Jones); Diana is abducted and taken to their base on the waterfront in Bengalla. Having been informed of Diana's abduction by the Jungle Patrol's captain Phillip Horton (Robert Coleby), the Phantom rescues Diana and escapes from Quill and his men to his secret base, the Skull Cave.Back in New York, now dressed as his civilian self, Kit meets with Dave Palmer at the World Tribune and once again meets with Diana, who has mixed feelings about him since his sudden disappearance several years before. Diana's would-be suitor Jimmy Wells (Jon Tenney) mentions he has seen one of the skulls in the Museum of World History. Kit and Diana hurry there and are captured by Drax and his men, who steal the second Skull and unite it with the first, revealing the location of the third Skull on an uncharted island in the Andaman Sea known as the Devil's Vortex. Kit manages to escape from Drax and his henchmen and, as the Phantom, evades the police outside the museum. Meanwhile, after Sala reveals that Diana is his girlfriend, she flies Drax, Quill and Diana to the Devil's Vortex, unaware that the Phantom has managed to hitch a ride on one of the plane's landing pontoons.On the island, Drax meets with the pirate Kabai Sengh (Cary-Hiroyuki Tagawa), direct descendant of the Sengh Brotherhood's original leader, who possesses the third Skull. Sengh warns Drax of the existence of the Fourth Skull, which controls the power of the three. The Phantom appears and battles both men, with Kabai Sengh killed by his own pool of sharks, and Diana and Sala cooperate to defeat the other villains. Drax unites the three Skulls and turns their power against the Phantom; in the process, Quill is accidentally disintegrated after the Phantom recovers his father's gunbelt. The Phantom uses the Fourth Skull - his own ring - to turn the Skulls' power back against them, destroying them and Drax in a powerful explosion. As the island is destroyed, the Phantom narrowly escapes with Diana and Sala.In Bengala once again, Diana reveals to the Phantom she has figured out his secret and his double identity. Kit removes his mask, informing her that he is allowed all of his secrets to only one person, the woman he intends to marry, but she leaves again for New York. Kit's father laments his son's failure to pursue Diana, but states that she will return to the Phantom's jungle, and to Kit, one day.