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Press agents Jerry Miles and Mike Strager are hired by ex-gangster Ace Miller to promote the opening of his new nightclub, the Zombie Hut.  As part of their campaign, Jerry and Mike advertise the appearance of a real-live zombie on opening night and hire Sam, a boxer, to pose as the creature.  When radio announcer Douglas Walker, Ace's nemesis, recognizes Sam and threatens to expose Ace unless he produces the real article, the ex-gangster tells Jerry and Mike that they will join the living dead if they fail to produce a zombie at the club's opening.

In search of a zombie, the two visit Professor Hopkins, the curator of a museum, who refers them to zombie expert Dr. Paul Renault, a resident of San Sebastian Island.  To avoid carrying out their mission, Mike and Jerry decide to hide out in California, but Ace overhears their plans and orders his henchmen, Benny and Gus, to escort them to the next boat bound for San Sebastian.  On the island, Joseph, Renault's assistant, watches as Mike and Jerry come ashore.  Joseph reports the arrival of the newcomers to his boss and also delivers a new vial of zombie vaccine.  Because the subjects of his experiments keep dying, Renault sends his zombie servant, Kalaga, to recruit some new guinea pigs.

Meanwhile, at a café in town, dancer Jean La Danse overhears Mike and Jerry discussing zombies and offers to help them find one if they will book her passage on the next boat leaving the island.  After the two agree to her terms, Jean leads them into the jungle, unaware they are being followed by Kalaga.  As they proceed toward the sound of native drums, Kalaga knocks down Mike, and when Jerry becomes separated from Jean, the zombie spirits her away.  To hide from the hostile natives, Mike and Jerry take refuge in a hut, where Jerry climbs into a straw trunk and Mike disguises himself in blackface.  When the natives thrust their spears into the trunk, Jerry runs into the jungle and is followed by Mike.  The two climb a tree and from their perch, they see Dr. Renault's castle.

Inside the castle, the doctor is about to inject Jean with his formula when his dogs begin to bark.  Sent to investigate, Joseph finds Mike and Jerry hiding in the tree and escorts them back to the house.  After they question Renault about zombies, the doctor decides to eliminate them by using them as his guinea pigs instead of Jean.  When Joseph requests that they dig two holes, Jerry willingly agrees, unaware that he is digging his own grave.  The impact of Mike's shovel hitting the ground triggers a secret passage to open, sending Mike into a tunnel where he sees Kalaga.  Scurrying back outside, Mike tells Jerry about the zombie, but Jerry dismisses his friend's ravings as a hallucination.

That night, as Jerry undresses in the closet of their bedroom, Kalaga steals in through a secret passageway and abducts Mike.  Thinking that Mike has stepped out into the hallway, Jerry climbs into bed and goes to sleep.  Meanwhile, in the lab, Renault injects Mike with his zombie serum, and after his patient enters a state of suspended animation, the doctor orders him to return to his room.  When Jean tries to call for help, Joseph ties her up and orders Kalaga to bring Jerry to the lab.  As the doctor straps Jerry to the operating table, Jean frees herself and knocks Joseph unconscious.  The little monkey that has trailed Jerry into the house then slips into the lab and steals the doctor's syringe.  While Renault chases the monkey, Jean frees Jerry, and they run out of the lab.  The doctor follows them, and as he and Jerry struggle for control of the doctor's gun, Kalaga appears at the door.  When the doctor orders Kalaga to kill, the zombie cracks Renault over the head with a shovel and throws him into one of the open graves.

After retrieving the zombie-like Mike, Jerry and Jean hurry to the boat and sail back to New York.  On the opening night of the Zombie Hut, Walker gleefully anticipates debunking Ace, while Ace anxiously awaits the return of Mike and Jerry.  When their boat docks, Mike, Jerry, Jean and their monkey are met by Benny and Gus, who escort them to the club.  Before Mike can make his debut as a zombie, however, he comes out of his trance.  Ace threatens to kill them, but after quickly switching off the lights, Jean takes the syringe from the monkey and injects Ace with it.  When Ace is presented onstage, the experts authenticate that he is a real zombie, and a relieved Jerry sinks into the couch and sits on the syringe.