In 1912, 13-year-old Henry "Indiana" Jones, Jr. is horseback riding with his Boy Scout troop at Arches National Park in Utah. While scouting caves, Jones discovers a group of grave robbers who have found a golden crucifix belonging to Francisco Vázquez de Coronado and steals it from them, hoping to donate it to a museum. The men give chase through a passing circus train, leaving Jones with a bloody cut across his chin from a bullwhip and a new phobia of snakes. Jones escapes but the local sheriff makes him return the cross to the robbers, who immediately turn it over to a mysterious benefactor wearing a Panama hat. Impressed with the boy's bravery, the leader of the robbers gives Jones his hat.
In 1938, Jones battles "Panama Hat" and his henchmen on a ship off the storm-blasted coast of Portugal. Escaping overboard just before the ship explodes, he recovers the cross and donates it to Marcus Brody's museum. Later, Jones learns from Walter Donovan that his father, Henry Jones, Sr., was searching for the Holy Grail using an incomplete inscription from a stone tablet as a guide and has since vanished. Jones receives Henry's Grail diary via mail from Venice and heads there with Marcus, where they meet Henry's Austrian colleague Dr. Elsa Schneider. Beneath the library where Henry was last seen, Jones and Elsa discover a set of half-flooded catacombs that house the tomb of a First Crusade knight that contains a complete version of the inscription that Henry had used, revealing the location of the Grail. They flee when the petroleum-saturated waters of the catacombs are set aflame by the Brotherhood of the Cruciform Sword, a secret society whose mission is to protect the Grail. Jones and Elsa capture Brotherhood member Kazim. When Jones explains that his only goal is to find his father, not the Grail, Kazim tells them Henry's location. Looking through the diary, Marcus finds a map drawn by Henry of the route to the Grail, which begins in the ancient city of Alexandretta. Jones removes the map from the diary, gives it to Marcus for safekeeping, and sends him to İskenderun, the city built on the ruins of Alexandretta, to rendezvous with their old friend Sallah. Elsa begins a relationship with Jones before they depart to find Henry.
Jones and Elsa head to a Nazi-controlled castle in Austria where Henry is being held. Jones finds Henry and frees him only to be quickly captured by SS Colonel Ernst Vogel. He learns that both Elsa and Donovan are Nazis who are using the Joneses to find the Grail for them. Elsa kisses Jones goodbye as she departs with Donovan and Vogel. Marcus is captured in Hatay State while meeting with Sallah. After their escape from the castle, Henry tells Jones that the Grail is guarded by three booby traps and his diary contains clues needed to pass them safely. Disguised as a German Army colonel, Jones recovers the diary from Elsa at a Nazi book burning rally in Berlin and comes face to face with Adolf Hitler, who autographs the book without recognizing it or him. Indy and Henry board a Zeppelin to leave Germany, but are discovered and forced to escape in its parasite biplane. A dogfight with Luftwaffe fighters ensues; although Jones and Henry are forced to crash-land, they survive and successfully bring down their pursuers.
In Hatay, Sallah tells them of Marcus's abduction. The Nazis have been equipped by the Sultan of Hatay and are already moving toward the Grail's location, using the map possessed by Marcus. Jones, Henry, and Sallah find the Nazi expedition, which is ambushed by the Brotherhood. During the battle, Henry is captured by Vogel while attempting to rescue Marcus; Kazim and his comrades are killed. Jones pursues the tank on horseback and, with the aid of Sallah, saves Henry and Marcus. He is caught up in a fight with Vogel, but escapes just before the tank goes over a cliff, sending Vogel to his death.
Jones, Henry, Marcus, and Sallah catch up with the surviving Nazis, led by Donovan and Elsa, who have found the temple where the Holy Grail is kept but are unable to get past the first trap. Donovan shoots and mortally wounds Henry to force Jones to risk his life in the traps to find the Grail and use its healing power to save his father. Using the information in the diary and followed by Donovan and Elsa, Jones safely overcomes the traps (which include fast-moving saw blades, a word puzzle, and a hidden bridge over a bottomless pit) and reaches the Grail's chamber, which is guarded by a knight. The man has been kept alive for 700 years by the power of the Grail, which is hidden among dozens of false grails. The true Grail grants eternal life, while the false ones will kill any user. Elsa intentionally selects a wrong cup for Donovan, causing him to rapidly age and crumble to dust after drinking from it. Jones drinks from a simple clay cup that proves to be the true Grail, but the knight warns that it cannot be taken out of the temple and that its guardian must stay within in order to remain immortal.
Jones fills the Grail with holy water and brings it to Henry, healing him instantly. Elsa disregards the knight's warning and tries to take the Grail with her, causing the temple to collapse around them when she crosses the Great Seal set in the floor at the entrance. When the Grail falls into a chasm in the floor, Elsa plummets to her death trying to recover it. Jones nearly suffers the same fate before Henry convinces him to leave it. The Grail Knight watches the Joneses, Marcus, and Sallah ride off into the sunset.
Harrison Ford as Indiana Jones
River Phoenix as a younger Indiana Jones
Sean Connery as Henry Jones, Sr.
Alex Hyde-White plays Henry in the film's prologue
Denholm Elliott as Marcus Brody
Alison Doody as Elsa Schneider
John Rhys-Davies as Sallah
Julian Glover as Walter Donovan
Additionally, Michael Byrne portrays Ernst Vogel, Kevork Malikyan portrays Kazim, Robert Eddison appears as the Grail Knight,
Michael Sheard appears as Adolf Hitler, Ronald Lacey cameos as Heinrich Himmler. Alexei Sayle played the sultan of Hatay. Paul Maxwell portrayed "the man with the Panama Hat". Pat Roach made a short cameo as the Nazi who accompanies Vogel to the Zeppelin.
It is the third installment in the Indiana Jones franchise.
A sequel, Indiana Jones and the Kingdom of the Crystal Skull, followed in 2008.