Acrisius (Donald Houston), the king of Argos, has his daughter Danae (Vida Taylor) imprisoned in a tower, out of jealousy for her beauty. Zeus (Laurence Olivier), the king of the gods, has sex with the young maiden, and from this union a son, Perseus, is born. Acrisius, fearing for his own safety, has his daughter and young grandson sealed inside a chest and thrown into the sea in the hopes of killing him. Out of revenge, Zeus kills the king and has his brother Poseidon (Jack Gwillim) release the sea monster known as the Kraken onto Argos, with the instruction that Danae and Perseus do not come to harm. The mother and child are washed up on the island of Seriphos, where Perseus grows into a young man.
Meanwhile, Calibos (Neil McCarthy), the son of the sea goddess Thetis (Maggie Smith), is due to be engaged to Andromeda (Judi Bowker), the princess of the kingdom of Joppa and daughter of Queen Cassiopeia (Sian Phillips). However, due to him being spoiled from birth by his mother, Calibos has destroyed the Wells of the Moon (which were trusted into his care) and killed off Zeus's sacred winged horses, until the only survivor is Pegasus. For this and many other atrocities, Zeus punishes Calibos by transforming him into a deformed satyr and having his people banish. Out of revenge, Thetis transports the adult Perseus (Harry Hamlin) from Seriphos to an abandoned ampitheatre in Joppa.