Some time ago, two grave robbers break into an Egyptian tomb to plunder its treasures. While one is eager to take the loot, the other is scared of the curse. The first opens one of the sarcophagi and tells the other that someone will pay good money for what they find.
In the present, Hercules is attending a festival being held to scare away the ghost of the king Cecrops. While talking with Phineas, an old friend, a man in Egyptian clothes comes and orders Hercules to leave. He replies that he was invited. A fight breaks out and Hercules beats up the man and some of the others who attacked him.
As the fight ends, the Princess Anuket comes and tells Hercules that she has chosen him to find her mummy. Hercules thinks she has lost her mother, but Anuket corrects him. Elsewhere, Salmoneus buys the mummy from one of the looters. He pays ten dinars for it and kisses the headgear, saying that the trinkets alone are worth more than ten dinars. As he walks away, the mummy's hand begins moving.
Anuket tells Hercules that she must find her mummy, but Hercules refuses to help her because she encourages slavery. Angry as Hercules walks out on her, she calls one of her slaves and tells him, "We have work to do." Meanwhile, Salmoneus takes a delivery of wax, telling the deliveryman that he is planning on opening "Salmoneus' House of Horrors". Anuket follows Hercules back to the festivities, she begins flirting with Hercules and charms him into agreeing to find the mummy.
The deliveryman is captured and questioned by a group of thugs. The deliveryman tells their leader, Sokar that the mummy is in the "House of Horrors". Sokar asks the deliveryman about the ankh, and he tells him that the curator, Salmoneus is wearing it.
In the marketplace, Hercules is attacked by some more men and he easily subdues them. After beating them, he meets Salmoneus, who wants Hercules to endorse his "House of Horrors". Hercules declines and goes back to Anuket, she tells him about Sokar, who is also after the mummy; he was her father's high priest, who wanted to marry her but her father refused. Sokar is watching the princess and Hercules from a distance and orders his men to bring him the mummy.
At the "House of Horrors", Salmoneus is scared by the mummy and tries to run out of the place, but when he sees Sokar's men coming he wraps himself up in some fabric and the men, mistaking him for the mummy, take him to Sokar. Sokar snatches the ankh from around Salmoneus' neck and orders him to bring the mummy to him or he will kill him.
Hercules and Anuket go to Cecrops old war room, where they encounter an apparition. Hercules is not convinced of the truth of the ghost; smashing a mirror the ghost is revealed to be a simple illusion. Hercules and Anuket determine that Sokar is behind it. Hercules and Anuket discover that Salmoneus had the mummy all along. When Salmoneus goes to show them the mummy, the mummy is missing.
Anuket says that if the mummy consumes human life, it will become a monster and Sokar will have control over it. Hercules says they need to find it before that can happen. They follow the mummy into the old war room, but Anuket soon disappears. The mummy comes and attacks Hercules, who throws it into a pit, soon discovering that Anuket is in the pit also. Salmoneus, scared by a rat, accidentally knocks Hercules into the pit too.
Sokar captures Anuket once more, leaving Hercules to fight the mummy again. Hercules manages to restrain the mummy by trapping it in an iron maiden. Back in the town, Salmoneus dresses everyone up as mummies in order to fool Sokar's men. Hercules fights the Egyptian men again and Anuket's slave saves her life by taking a blade, which was meant for her.
The mummy has broken free and returns to the town, where it drains Sokar's life force. Hercules grabs the mummy's bandages and spins it into a boiling pot of "witches brew." As Anuket goes to the slave who saved her life, he asks her to let him die a free man; she allows this and vows that there will be no more slaves in Egypt.
While Hercules and Anuket say their goodbyes, she offers Hercules the ankh, but he says he cannot accept it, and she gives him a kiss instead. Salmoneus says he has given up on the "House of Horrors" but then Hercules gives him the idea of a "House of Heroes". Meanwhile, some of the townspeople are dragging the mummy away, and the scene closes on the mummy's hand moving.