The story opens in Monument Valley, Utah, in 1912. A troop of Boy Scouts are exploring the area. One of the Scouts, Indiana Jones, finds a cave where where a party led by a mercenary wearing a fedora and leather jacket finds the cross of Coronado, a priceless Spanish American artifact. Indy, believing it belongs in a museum, takes it and is pursued, attempting to escape by horseback. He is followed by the mercenaries in autos, but boards a circus train to elude them. While on the train, he crawls through a car full of snakes (thereby providing the backstory for his reptilophobia) and then finds himself in a car with a lion, from whom he escapes by using a bullwhip he finds hanging on the wall, in which his first attempt backlashes and gives him a cut on his chin (explaining the origin of his scar, a real scar borne by actor Harrison Ford). After a few more dangerous encounters, including a near castration by the horn of a rhinoceros annoyed by the tussle on his roof, Indy gets the cross home, where his father is busy working on drawing what looks like a stained glass window. When Indy excitedly tries to tell his father about it, his father rebuffs him, telling him to calm down by counting to 10 in Greek.
Moments later a fellow scout whom Indy had sent for the Sheriff when he discovered the illegal dig returns with the lawman; but he is dismayed to find that the burly businessman wearing a panama hat who had hired the mercenaries had also bought the law, and Indy is forced to surrender the cross to the looters. However, before the head mercenary leaves the house, he says to Indy "You lost this time, Kid, but you don't have to like it",and puts the fedora on the boys head. As Indy smiles the scene fades and the scene changes to 1938 aboard a freighter in a violent Atlantic storm. Indy has tracked down the cross, but is again confronted by the man in the panama hat and his henchmen. He grabs the artifact, fights off the crew and dives into the ocean scant seconds before a massive wave collapses the ship's funnel, causing it to fall onto a load of explosives. As Indy grabs a life preserver from the wreck, he sees the panama hat floating by. As the hulk of the ship sinks, the name is visible on the bow: Coronado.