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In the late 1760s, wily, one-legged pirate Long John Silver is brooding in the Porto Bello, Panama tavern owned by his would-be sweetheart, Purity Pinker, because he and his crew no longer have their own ship. Upon learning that his most-hated rival, Mendoza, has kidnapped Elizabeth, the daughter of Governor Henry Strong, and young Jim Hawkins, with whom Silver shared an adventure, Silver plots to use the situation to his advantage. Silver shows his men a map of Treasure Island, to which he had traveled with Jim, and claims that it still holds a fortune in buried gold. Silver relates that he needs a special medallion to decipher the map, although he does not know who has it. To obtain money to buy a ship, Silver goes to the governor's mansion, where he convinces Strong that because he is also a pirate, he is the most capable to negotiate with Mendoza. Silver tells the governor that he will alert him to Mendoza's location after Mendoza departs, then takes the ransom to the spot on the beach designated by Mendoza. Silver is surprised when the ransom is collected not by Mendoza, but by one of his cohorts, Billie Bowlegs, who double-crosses his two companions by killing them. Silver captures Bowlegs and forces him to row to Mendoza's ship, where Silver threatens to reveal to the crew that Mendoza was trying to cheat them out of their share of the ransom unless Mendoza agrees to meet with him. Mendoza then dines with Silver and listens to his plan to rob the governor's wealthy warehouse. Silver is pleased to see young Jim, although he pretends not to know him in order to protect him. Silver is especially gratified to see that Jim has the medallion, and arranges for him and Elizabeth to accompany the pirates to the warehouse. There, Silver's men overwhelm Mendoza's crew, allowing the youngsters to escape. Silver's crew steals the supplies, including barrels of rum, and Silver releases Mendoza so that he will be blamed for the robbery. After ordering his men to trade the plunder for a ship, Silver goes to the governor's mansion, where Elizabeth and Jim are regaling Strong with tales of Silver's bravery. Silver returns the ransom money to Strong and asks if he can adopt Jim, but Strong refuses, stating that Jim must go home to England. Thwarted, Silver goes back to Purity's, where she tries to convince him that if they were married, Strong might allow them to adopt Jim. Silver reluctantly agrees, and in the early morning, sneaks into Jim's room to steal the medallion. Jim awakens, and so Silver tells him about the map and the rest of the gold buried on Treasure Island. Eager for adventure but wary of Silver, who had misled him in the past, Jim refuses to give him the medallion, but agrees to meet him later. Soon after, at the tavern, a constable arrives in search of Silver, whose men sacked a plantation after getting drunk on the stolen rum. Purity gets rid of him, then warns Silver to keep out of sight while she prepares for the wedding. While Purity is gone, Asa MacDougal, captain of the Thistle , which is to take Jim to England, arrives. When MacDougal laments the lack of a crew, Silver promises to find men and to meet him before he is due to sail. After Silver sends his cohort Patch to free the crew, Jim arrives at the tavern, and Silver lies to him, telling him that he is willing to return to England to stand trial for piracy. As Purity is preparing for the wedding, Silver learns that his men have been freed, so he dashes to the harbor to meet MacDougal. Although MacDougal is dubious about Silver's scruffy men, he signs them on, with Silver to serve as cook, and soon they set sail. Silver's men are baffled by Silver's talk of England, but when they are alone, he assures them that they will mutiny, then head to Treasure Island. Jim overhears their scheming, and, crushed that Silver had lied, warns MacDougal. MacDougal, who professes to be a religious man, promises that no harm will come to Silver, but the next day, when the mutiny is foiled, orders that Silver and his men, including Jim, be marooned on lonely Socorro Island. Unknown to MacDougal, the island is the secret hideout of Mendoza, and after executing a cunning plan, Silver and his men steal Mendoza's ship and set off in search of treasure. Jim is baffled by the change in plans, but Silver promises that after they find the gold, he will use it to pay for his defense when he stands trial. Meanwhile, Mendoza has learned of Silver's destination and follows him in his other ship. When Silver's crew lands, they are shot at by an unseen assailant, and Jim, remembering the stockade where they hid during their previous adventure, leads the men there. Jim is horrified to learn that their assailant is Israel Hands, who had attacked him during his first trip to Treasure Island. At the time, Jim shot Hands in self-defense, blinding Hands, who was then marooned on the island. When the crew is set upon by Mendoza's men, Hands leads them to safety, unaware that Jim is with them. Silver follows the map to the treasure, buried in a series of caves, while Jim stays above ground as a lookout. When Hands discovers that Jim is there, he begins to chase him, and the frightened boy runs to the edge of a cliff, where he dodges as Hands charges him. Hands falls to his death, and when Jim tries to return to Silver, he is captured by Mendoza. Using Jim as bait, Mendoza calls to Silver, who agrees to surrender himself in exchange for the lad's freedom. Jim is so touched by Silver's devotion that he refuses to leave his side until Silver slaps him. Jim then runs to join the other pirates, who use handmade grenades to launch an attack on Mendoza's men. Silver's crew triumphs, and Jim helps Silver trounce Mendoza. Silver maroons Mendoza on Treasure Island, then returns to Porto Bello, where he becomes "respectable" by helping Government House arm the harbor against piracy. Silver, Jim and the others are eating a celebratory dinner when Purity, wearing her wedding dress, enters, and a horrified Silver escapes with Jim to pursue more adventures.