Salmoneus is traveling through a field, lamenting about being robbed by bandits, saying that Hercules is right, his quest for riches leads him to trouble. Looking for food, he goes to a temple in the distance. Arriving, he finds it deserted, but filled with gold bars. Excited, he goes towards them but falls through a trap door.
Iolaus and a reporter named Moria are looking for some girls who disappeared from a local village, one of whom is Iolaus' cousin, Regina. Moria believes they were taken by from visitors from other continents (or beyond the stars), but Iolaus dismisses her. She irritates him by complaining about food and asking a lot of questions, and soon arrive at the same temple as Salmoneus. Jumped by bandits, they fight them off, and find a lot of food where there was gold before. Sleeping afterwards, Iolaus and Moria find gold where the food was, and inspecting it, they both end up down the trap door. At the bottom, they find a village populated with hippie-type people, one of whom is Salmoneus, going by Brother Sal now, who doesn't remember Iolaus or Hercules.
They are invited to dinner, and meet Kamaros, the village leader. They learn that everyone lives in peace and harmony, and worship a god named Lorel. Iolaus doesn't like the smell of the dessert and he, along with Moria go off to investigate the village. They are suspicious of how everyone is acting, and think it might have something to do with whats in the food.
While Iolaus walks around, he finds Regina, his cousin, who doesn't know who he is and runs away when he presses further. Lorel appears before them, and it turns out she is a young girl. Brother Sal comes over and gives Iolaus a tour so Mariah can snoop. While in the gold mines, Iolaus questions Brother Sal on his view on gold, expecting him to answer in his typical money-loving way, but he dismisses its importance. Iolaus notices there is something clearly wrong, as this is nothing like the old Salmoneus.
Meanwhile at Kamaros' dwelling, Aurora, a village resident, refuses to join in the free love and runs off. Moria finds her crying about Lorel, saying that she is her kid sister. Iolaus comes up and says he got Salmoneus to not eat the food by saying he would join his band. He gives Moria a few gold nuggets and goes to free Lorel.
Iolaus finds Lorel sitting very still in a room, almost in a meditative state. When he tries to carry her away, Kamaros arrives with his guards. Iolaus fights them off well, even with Lorel on his back, but is shot by a dart. When he comes to, he finds himself strapped to a chair and is subjected to a spinning fan that uses light to manipulate the mind. He is also prevented from sleeping to help weaken his mind further.
Aurora and Moria find Salmoneus, who is frustrated because he has stopped eating the food and can't find Iolaus. Moria then temps him by sticking the gold nuggets down her shirt, and suddenly he is no longer Brother Sal. Finding Regina, who Iolaus had earlier convinced not to eat either, the three girls go to take Lorel from Camarous. They run into Iolaus, who is spouting the hippie mantra and has seemingly been brainwashed. Moria tries to talk some sense into him, but he does not snap out of it, possibly because Kamaros is listening in on their conversation. Salmoneus comes up, having remembered Iolaus, and hanging around "some bug guy". Instead of helping though, he heads off to gather the gold.
While Moria is looking for Lorel, Kamaros finds her and locks her up in the same torture room Iolaus was in, trying to get her to eat the food, which Iolaus had earlier figured out had been laced with lotus flower extract. Bringing in Iolaus to try to talk her into it, he reveals he wasn't brainwashed after all and fights Kamaros and his guards. Salmoneus arrives with a wheelbarrow full of gold and starts throwing it around to help in the fight. A sword fight begins and Iolaus recognizes a symbol on his sword, and reveals that Kamaros is actually Karkus, the Butcher of Thessaly. Iolaus frees Mariah and continues fighting.
The girls go with Salmoneus and try to convince the others that Lorel isn't a god. When Lorel shows up, she tells everyone the same. All the villagers begin to believe they have been deceived. Lorel is then united with her sister Aurora.
Karkus has cut a rope that will make the city fall in on itself. Iolaus ends up killing Karkus by pushing him into the fan that was used to brainwash him. Most of the villagers make it through a secret exit to the field outside of the city. With the city gone, everyone rejoices in being outside in the sun and Salmoneus has some gold nuggets as a souvenir. Moria and Iolaus walk away, with her wanting to write a profile on Hercules. Seeing his reluctance, she asks Iolaus to discuss it over dinner.