During the Late 1860s, Union Armies prepare to siege the Confederate capital of Richmond, Virginia. As the American Civil War rages on, four Union prisoners (Cyrus Harding, Herbert Brown, Neb and Gideon Spillet - the last mentioned being a Union war correspondent having just arrived to the prison) plan to escape the violence using a Confederate hydrogen gas balloon kept in their prison camp. During a massive storm they capture the balloon along with a Confederate guard (Pencroft) who asks for his life to be spared in exchange for instructing the Union soldiers on how to control the balloon. The group find themselves at the mercy of the weather and float far out at sea with no idea of where they are. Whilst lowering the balloon for a closer look at their whereabouts, the controls break and soon afterwards the balloon crashes into the ocean during a thunderstorm. They find themselves on an uninhabited island in the South Pacific filled with animals and creatures that live nowhere else on Earth. The castaways set up shelters, establish basic roles for each other and begin exploring the strange island from coast to coast but are soon attacked by a Giant Crab whilst at the opposite side of the island. The castaways kill the crab by pushing it into a geyser and thereafter feast on its remains. They scale one side of the mountain and find a flock of goats that they intend to keep as livestock. Soon after this, the castaways spot the remains of a shipwreck, when they reach the washed up shipwreck they find three bodies, two unconscious women and a man, the latter of whom they discover is dead. Once the women awake they reveal themselves as Lady Mary Fairchild and her niece Elena, they decide to join the castaways. While the women rest the other castaways explore further into the island where they discover a cobweb-ridden cave containing many old artefacts and a book that appears to belong to Captain Nemo, a man who was believed to be dead. They decide to make the cave their shelter and set upon making it more homely with furniture and a makeshift elevator - they started working on building a boat to leave the island. Soon a chest washes up containing books, maps and rifles, alongside other tools and appliances, the weapons are marked "Nautilus". Whilst out fishing, Captain Spillet is ambushed by a Phororhacos, a prehistoric flightless bird thought to have died out years ago. After the Phororhacos died seemingly to Herbert, the castaways find a bullet inside the "Terror Bird's" remains, proving that someone else tried to kill the bird, and more importantly, that someone else is on the island.
Whilst sunbathing together, Herbert and Elena are attacked by giant bees, who trap them in their hive. Elena and Herbert escape from the bees and head deeper into the cave, where they find the Nautilus, the submarine belonging to Captain Nemo which was supposed to have sunk 8 years earlier on the coast of Mexico, they enter the Nautilus but leave when Elena gets worried. The others are distracted by a boat that they believe belongs to pirates who later send out a paddle boat with three men, they soon spot the castaways and engage in a gunfight that results in the death of all three pirates and then bombardment from the larger vessel's cannons until an explosion causes it to sink. Captain Nemo arrives from the sea and startles Elena and Herbert. Elena summons the others and Nemo reveals himself. Captain Nemo explains that he has been acting as their guardian angel ever since they landed on the island - saving Captain Harding from drowning, delivering the gun to them and killing the Phororhacos, as well as using an explosive charge to sink the pirate ship. He expresses his discontent with Gideon Spillet's war writing stating "You supply the ink; the soldiers supply the blood." and his overall disappointment with other people - suggesting that he only revealed himself to the castaways because he was impressed by their resourcefulness and needed to leave the island due to the impending eruption of the volcano. They converse aboard the Nautilus and Captain Nemo explains that he has been using the Nautilus as his home whilst observing the nature on the island and that he intends to bring back his research to civilisation, he also introduces the group to his plan to refloat the pirate ship by making it airtight, building a long bamboo pipe and using a pump fill it with air. Nemo also shows them how to breathe underwater with large shells and brings them to see a forgotten underwater civilisation. The volcano begins erupting dramatically forcing the group to shelter in the Nautilus to await their impending death. All hope appears lost until Captain Harding suggests in a moment of brilliance that they could inflate the hydrogen ballon inside of the ship. As they set about refloating the ship they are attacked by an undersea terror, a giant squid-like Cephalopod resembling an Ammonite. They kill the ammonite with an electric rifle of Nemo's making and Nemo begins inflating the balloon from the pump inside of the Nautilus - the boat rises from the depths. The crew wait for Nemo as he gathers his research from the submarine but unfortunately he became trapped in his own submarine and had to be left behind. The castaways all pledge that upon returning to civilisation they will dedicate their lives to "working for a peaceful and bountiful world, as Captain Nemo would have it."