While on the way to Cyros, Iolaus saves a man named Autolycus from a gang of men. The men are trying to take a chest from Autolycus, but Iolaus drives them off. Autolycus takes a gem from the box and hands it to Iolaus, then the men come back and arrest him for the theft of the box.
In Cyros, Hercules discovers that Iolaus has been imprisoned for stealing the king's jewels, the punishment: death. Hercules goes to King Meneleus and tells him Iolaus is his friend, the king says his trial will be tomorrow and he will be executed shortly after. Hercules tries to convince the king that Iolaus is not a thief, but the king does not believe him. Hercules is introduced to Dirce, Iolaus' lawyer and the daughter of Meneleus.
In the prison, she tells Hercules and Iolaus that in Cyros, crimes do not go unpunished and innocent people have been executed when the real culprit has not been exposed. She says they need to catch him or Iolaus' "goose is cooked." Iolaus tells them it was Autolycus and Dirce says he is impossible to catch. Hercules tells them he will catch Autolycus.
Hercules finds Autolycus, but he gets away, meanwhile Iolaus is brought to trial. Hercules chases him to the ruins of an old castle. In the castle, Hercules and Autolycus begin fighting. As they battle each other, the floor caves in and they fall into the hole. Dirce manages to get Iolaus a reprieve, by getting the king to enact the "Erebus test", the ancient test of innocence.
Underneath the castle, Hercules finds the ruby hidden in Autolycus' clothes. He says he left Iolaus because he thought he could look after himself. Hercules says that Iolaus will be executed for it. For Iolaus' first test, he is subjected to "dunking". He is tied to a rock and thrown into the river; if he drowns, he is guilty. Iolaus manages to pass the test by slowing down hi heartbeat. Dirce tells him he has two more tests to pass. The second test is "pressing", where Iolaus has a board tied to his back and heaped up with rocks, he must stand for an hour without dropping any rocks. Under the castle, Hercules and Autolycus find a room filled with treasure and also a huge monster serpent.
While fighting the snake, Autolycus picks the lock on the door and they escape from the serpent. Back in Cyros, Iolaus passes the second test and the third test is to remain in a pit with a wild boar for three hours without being killed or losing any blood. In the ruins, Autolycus tells Hercules how he came to be the King of Thieves. After the time is up, Dirce tells the men to lift the lid on the pit, Iolaus comes out , but as he pulls himself from the pit, he cuts him hand and the king sees the blood. Iolaus says he passed all the tests and he cut himself after he fought the boar. The king says the Erebus test proves Iolaus is guilty and will be executed.
Hercules and Autolycus look for the wheel to open the door, Autolycus looks for something to hold the wheel so they can leave. As he finds something, the serpent appears and chases them. Hercules fights the snake, telling Autolycus to escape, but Autolycus comes back to help Hercules. The two beat the serpent but Autolycus is injured in the fight, Hercules picks him up and escapes from the castle.
Autolycus tells Hercules that he tried to escape but he cannot move his legs. He says he does not want Iolaus to die for his crimes, but Hercules must carry him to Cyros. In Cyros, the king prepares to execute Iolaus, Dirce says she cannot let Iolaus die, he tells her to keep fighting for justice. As Iolaus' head is placed in the guillotine and asks Iolaus if he has anything he wants to say. Iolaus declares that he is innocent and the king should be nicer to his daughter. Hercules and Autolycus arrive just in time and Autolycus gives the ruby back to the king and drops to the floor dead. Iolaus is saved from execution, the king says Autolycus will have a state funeral, but notice that his body missing, along with several money pouches. Later on, Hercules and Iolaus pass an old man, who Hercules thinks he recognizes, Iolaus asks if he wants to go after him, Hercules says he does not and then the man laughs and runs away.