Don Alejandro Vega calls his son, Don Diego Vega, home to Los Angeles from Madrid, Spain where he’s training as a military officer. Upon arrival, Diego is horrified to find the Alcalde is mistreating the people, and as far as he knows, his father is still the Alcalde.
However, when he arrives to his childhood home, he finds that Luis Quintero is now the Alcalde after his father was forced to resign. Diego pretends to be aloof and uncaring to the people’s plight, and his father thinks he’s a failure, but Diego secretly dons a mask, and takes on the secret identity of El Zorro. Decked out in all black, Zorro takes up the people’s cause and defends them against the tyranny of the Alcalde and his evil henchman led by Captain Esteban Pasquale.
As Zorro, Diego steals from the Alcalde and his tax men, but as himself, he pretends to be a foppish dandy afraid of confrontation, and in love with the finer things in life. Quintero wants to strengthen his position with the other Dons locally, so he offers up his 17-year-old niece, Lolita to Diego. Diego, having spotted her the day he arrived coolly accepts the Alcalde’s offer; much to his father’s chagrin.
Zorro threatens the Alcalde every chance he gets, and he tells the Alcalde he will only be safe by resigning his position and moving to Spain. At the same time, as Diego, he flirts with the Alcalde’s wife, Inez, and tells her wild tales of the latest fashions in Madrid. He fills her head with stories of how she belongs there instead of quiet Los Angeles to get her to help convince the Alcalde to leave.
Eventually, Captain Pasquale and Diego get in a little spat, and settle it with swords. Diego quickly kills the Captain, but his victory is short-lived as the Alcalde figures out that Diego is indeed Zorro. The Alcalde has him arrested, but Diego is two steps ahead of him.
When Quintero calls all the other Dons to the jail to witness Zorro’s execution, Diego escapes the jail. He and the people rise up to overtake the Alcalde. Quintero resigns; recommending Don Alejandro Vega be his replacement.
He and his wife head to a ship to set sail to Madrid as the Vega men stand triumphantly with the people.