
Diego de la Vega, the son of a wealthy landowner, returns from his studies in Spain and discovers that Los Angeles is under the command of Capitan Monastario, a cruel man who relishes in the misuse of his power for personal gain. Knowing that he cannot hope to single-handedly defeat Monastario and his troops, Diego resorts to subterfuge. He adopts the secret identity of Zorro, a sinister figure dressed in black, and rides to fight Monastario's injustice.



Diego is questioned by Monasterio regarding Don Nacho's location. The captain seeks to confirm if his foreman Benito, the primary suspect in crimes attributed to El Zorro, was at the ranch last night. Zorro springs into action when Monasterio threatens Benito.
Luis Rico, acting governor of California, cracks down on the helpless citizens of Monterey, ordering the peons to remove their vending stands from the public square, in "The New Order." Rico's order brings out the demon in pretty Theresa Modesto, who responds explosively to the threatened loss of her tamale stand. When she is jailed after battling Sergeant Garcia and the hated Especiales, Rico's special troops, she is bailed out by her friend, Don Diego.
Don Diego meets up with a very different kind of man.
A group of bandits fleeing Mexico arrive in Los Angeles. Led by the charismatic El Cuchillo (The Knife), they plan to steal a shipment of silver being guarded by Sgt. Garcia.
Returning to Los Angeles, El Cuchillo and his men are once again humiliated by Zorro. El Cuchillo then goes to the de la Vega hacienda and holds the family for ransom. Will he discover Don Diego's secret identity?
When Don Diego discovers that an old acquaintance plans to elope with a young man who is probably only after her family's jewels, he contrives to delay the wedding until he can confirm his suspicions.
An old opponent of Don Diego's arrives from Spain and tries to steal the army payroll. When defeated by Zorro, he recognizes the fencing style as Diego's and sets out to reveal Zorro's true identity to Sgt. Garcia.