Milo James Thatch is a bright young man, who is in the employ of the Smithsonian Institution (as their resident maintenance man). Milo has been inspired by his Grandfather, who often spoke of finding the Lost Continent of Atlantis. Milo attempts to convince several of the top people at the Smithsonian to fund an expedition, but almost all of them think him crazy.
Coming home one evening, Milo meets Helga Sinclair, who escorts him to the home of eccentric millionaire Preston B Whitmore. Preston claims to have known Milo's Grandfather, and presents him with a journal, that contains information about reaching Atlantis. Preston claims that he has a crew ready to go, but wants Milo to head the expedition. The young man eagerly accepts.
The expedition takes them to the waters off the coat of Iceland, where a giant submersible takes them to the ocean floor. Milo cautions the crew that something know as The Leviathan may be guarding the entrance to Atlantis. It turns out that the Leviathan is a giant mechanical sea creature, that ends up destroying the sub. Luckily, Milo and some of the crew escape, finding themselves in an underground cavern.
After braving several pitfalls and strange creatures, they finally make it to Atlantis, preserved in a sunken atmosphere. However, before they can approach, they are accosted by several natives, led by the King's daughter, Kida. Milo is soon able to communicate with the natives, and they soon reveal they know many different languages, including English. Kida leads the group into Atlantis, where she takes them to her father.
Kida's father is not at all pleased to meet these strangers, and requests that they leave. However, a member of the expedition party named Rourke requests to stay one day, and is granted this request.
After they are dismissed from the chambers, Milo explains that he feels the King is hiding something, and Rourke says he wants to know what. Milo is requested by the others to gain this information, and soon after meets with Kida. While Milo wants to know more about Atlantis, Kida is curious about the outside world.
Milo shows Kida the journal, and also finds that the Atlanteans' crystals around their necks also function as a key that can animate stone objects with flight. Kida explains that their civilization has lost the ability to read their own language, but Milo is able to decode the text on sunken ruins under the city. According to the information, there is a crystal that connects to the necklaces worn by the Atlanteans, and is considered their 'heart.'
Milo and Kida are soon accosted by Rourke, who it is revealed has come to Atlantis to find the crystal for monetary purposes. The others and Helga are soon found to be in on the scheme as well, and go to the King. The King denies any knowledge of the crystal's whereabouts, but Rourke soon finds a secret underground entrance under the throne room, where the enormous crystal is kept.
As the group watches, Kida suddenly takes on a blue-glow in her eyes, and ascends towards the crystal. As they watch, the crystal fuses with her, making her a glowing blue figure.
Rourke and the rest of the team bring the 'Crystal/Kida' above-ground, sealing her in a metal box. Though at first the others help Rourke, as Milo reasons with them, soon only Helga accompanies Rourke and the other soldiers out of Atlantis. As they leave, the crystal necklaces on the Atlanteans dim together.