Jim Hawkins works in a seaside in with his mother and father. When an old pirate takes up residence, the stress eventually kills Jim's father. The pirate tasks Jim with being on the lookout for a man with one leg. Jim never sees him, but he does see a blind beggar come to the inn and discover the old pirate. The blind beggar leaves, but the pirate realizes they will send for him soon.

Others arrive shortly, and only Jim and his mother are there to defend the inn. They give the pirate the black spot, and he dies. Jim rummages through the pirate's belongings, and finds a treasure map. He flees the inn with his mom and hides nearby while more pirates come and search the house for the map. Jim and his mother get away, and Jim shows the map to his Doctor and Squire Trelawney. The Doctor and the Squire, realizing what it is, decide to establish and exhibition to search for the treasure.

The Squire tells Jim and the Doctor about Long John Silver, a cook with one leg who has helped gather a crew. Jim wonders if this might be the man the old pirate at the inn was on the lookout for, but dismisses it as John is so charming and affable. The crew is gathered and the exhibition begins. Just before arriving at the island, Jim overhears a conversation between John and others on board and realizes they are discussing mutiny.

Jim shares this information with the Doctor and Trelawney, and with the Captain and the others who are still loyal, they prepare by moving supplies into their quarters. When they arrive the next day, Jim sneaks off with John and his men when they go to scout the land. While on land, Jim meets an old castaway who was stuck on the island for three years. He agrees to help with the problem of Long John and his men.

The Doctor, the Squire, the Captain and a few other men make their escape with the supplies and weapons, killing a few men in the process. They head to an old building where they barricade themselves in. Jim finds his way to them. They fight off a pirate attack, and one of their men is killed and the Captain wounded.

The Doctor leaves to find the castaway and Jim, wanting to do something, slips off as well. The others believe he has betrayed them when they discover he is gone. Jim sneaks to the HISPANOLIA (the boat) and fights off two pirates, stealing it and sailing it around the island so that Long John thinks it is gone. Jim sneaks back to the outpost in the night, only to discover John and his men have taken it over. John keeps Jim alive, against the wishes of his men, and Jim realizes John is trying to have a foot on each side of the upcoming battle to ensure he wins either way.

The next day John (who now has the treasure map from the Doctor) leads Jim and the pirates towards the treasure. When they arrive, they discover it has already been dug up. The Doctor and the castaway launch a surprise attack, killing or scattering the remaining pirates. Jim and Long John remain. The Doctor reveals that the castaway dug up and moved the treasure months ago, so he could freely give the map away as it was now useless.

While disappointed with Jim's apparent desertion, they welcome him back at the discovery of his theft of the boat. They head to where the treasure is now hidden and transfer it all to the boat and sail off, leaving two pirates stranded behind. Long John escapes at the first port they land at, but with only a very little of the treasure. Jim, the Doctor, the Castaway, Trelawney and the Captain arrive back home safely.