The Bat has struck again, making off with a priceless necklace even after warning the police that he would rob the safe at precisely 1 a.m., after which he intends to go to country in order to give the police a rest. On his way through the village of Oakdale, the Bat notices someone robbing the Oakdale bank. Intrigued, the Bat follows the robber, who leads him to the old Fleming mansion.
Inside the Fleming mansion, Cornelia van Gorder [Grayce Hamptom] and her ditzy maid Lizzie Allen [Maude Eburne] are discussing Cornelia's decision to rent the house for the summer. The big old house is a scary place, and Lizzie doesn't like the strange sounds, the strange caretaker [Spencer Charters], and the strange stories he tells about seeing ghosts in the house. Add to the fact that the Bat has taken to the country, and Lizzie is terrified of everything and anything. She's even gone so far as to set a bear trap outside her bedroom window, just in case the Bat decides to pay a vist. When Cornelia's niece Dale [Una Merkel], who works at the Oakdale Bank, returns home with her boyfriend Brook Bailey[William Bakewell] and tries to pass him off as a gardener, Cornelia is immediately suspicious (Cornelia: Any experience with alopecias? Brook: They dry up if you don't water them.), but Cornelia hires him anyway, at least until she can find out why Dale has brought him home.
A rock suddenly comes crashing through the window. A note on it reads: Get out of the house now while there is still time. Immediately thereafter, Dr Venrees [Gustav von Seyffertitz] drops by to inform Cornelia that the Oakdale bank has been robbed of a half million dollars and that Fleming, Sr, the owner of the mansion, is returning from Europe so Cornelia will have to vacate the house. Then, a heavy painting moves, and a voice from behind warns them to get out of the house. Becoming concerned, Cornelia phones the police. When Detective Anderson [Chester Morris] shows up, Cornelia explains her suspicion that Fleming, Jr [Hugh Huntley] is trying to frighten her out of the house, possibly because he rented it to her while his father was out of the country. Nowthat his father is returning, she thinks he may be trying to frighten her into leaving.
Soon everyone begins acting suspiciously. The doctor unlocks the broken window and "forgets" to relock it until Cornelia relocks it herself. Alone in the parlor for a few moments, Venrees unlocks the window again. Brook starts going around the house pounding on the walls. Dale phones Fleming Jr and asks him to come over. When he does, he brings a blueprint of the house so that they can locate a hidden room. Before they can find it, he is murdered, and Dale hides a piece torn from the blueprint under a tray. A storm is approaching, and the lightning knocks out the electricity. Someone phones from the garage, but when Det Anderson goes out to check, there is no one there. Detective Jones [Charles Dow Clark] arrives to help with the investigation. Dr Venrees finds the torn piece from the blueprint showing that the hidden room is behind a fireplace, but Det Anderson forces him to hand it over. When Anderson is poring over the blueprint, Venrees clobbers him with a heavy statue and locks his body in a closet. In the lightning flashes, the silhouette of the Bat can be seen peering into the window.
It gets even more intriguing. Brook turns out to be a cashier from the bank and the primary suspect in the theft. Fleming Sr is seen walking on the roof when he's supposed to be out of the country. Dale finds the secret room behind a fireplace and gets locked in, along with the Bat, Mr Fleming Sr, and the money. The Bat shoots Fleming Sr. Dale escapes and leads Inspector Jones, Cornelia, and Dr Venrees to the secret room. Just as the fireplace swings open, Venrees blows out the candle, allowing whomever was in the room to escape. Finally, Inspector Anderson figures it out. Dr Venrees and Fleming Sr robbed the bank together and hid the money in the house. Anderson arrests Venrees and locks him in a closet.
A strange man suddenly stumbles into the room. He's been hit in the head and is suffering from amnesia. He remembers only that he tried to phone from the garage. As they search the secret room for the money and find nothing, Cornelia thinks that she sees someone out on the roof and Anderson goes outside to catch him. Shortly thereafter, the garage is set afire. The amnesic man grabs a gun and orders everyone to be silent. The fire was set to get everyone out of the room, he explains, and the person who set that fire will be back shortly to get the money. They blow out the candles and wait. The Bat enters the house. The amnesic man points the gun at the Bat and orders Inspector Jones to disarm him. Just as they prepare to remove the black hood from the Bat's face, the Bat creates a distraction by knocking over a chair and escaping...right into the bear trap that Lizzie set so many hours ago.
The Bat has been captured. They remove his hood to see that it's Detective Anderson. The amnesic explains that he is the real Detective Anderson, but he was clobbered in the garage by the Bat, who took his IDs. But the Bat isn't ready to be captured. While he extols his great intellect, he pulls out a gun he found on the ground and forces everyone to put up their hands. Only Cornelia refuses. I took the bullets out of that gun only ten minutes ago, she says. Everyone jumps on the Bat, and the gun goes off. Cornelia was lying!
As the movie closes and the curtain falls on the stage, the Bat drops down from the ceiling. Chester Morris, who played Detective Anderson and the Bat, then addresses the audience. He asks them not to reveal the identity of the Bat to anyone and promises that, if they keep the secret, the Bat will not haunt their homes, steal their money, or frighten their children. [Original synopsis by bj_kuehl]