At a theatre in 19th century London, the magician Li H'sen Chang completes another successful performance as the manager, Henry Jago, congratulates him. Chang has his ventriloquist dummy, Mr. Sin, accept the congratulations. A man, Buller, bursts in and demands that Chang tell him where his wife is, as she came backstage the previous week. Chang invites Buller in where he threatens to call the law. When Chang doesn't provide him with answers, Buller storms off. Chang looks at his dummy, Mr. Sin… which moves on its own, nodding its head.
The TARDIS materializes by the river and Leela comes out, clad in period clothing per the Doctor's advice. The Doctor is suitably clothed as well and notices a poster for Chang. He suggests they go see him so Leela can learn about her ancestors and they head for the theatre.
At the theatre, Jago's worker Casey says he saw the phantom of the theatre, but Jago dismisses his concerns and offers to investigate later.
Buller is going through the streets when men confront him and attack. The Doctor and Leela hear a cry and go to investigate. The men overwhelm the Doctor but Leela holds them off long enough for the police to arrive. The Doctor trips one of them and goes after the others, but they've disappeared along with Buller's corpse. He notices a manhole cover and suspects they're left via the sewer. A policeman arrives and takes the Doctor and Leela into custody for starting a fight.
Chang is giving another performance with Sin and a hypnotized female spectator. Jago, looking on, notices blood dripping from Sin's hand.
The Doctor isn't able to provide answers to a sergeant's questions but he mentions the deaths of young girls. The Doctor is more interested in the captured Chinese coolie. The Doctor offers to translate but the coolie isn't talking. Down by the river, policemen are summoned and find Buller's corpse… seemingly chewed to death.
Chang is brought in as a translator and asks for a pen and paper. When the sergeant is distracted, Chang slips the man a poison pellet. The Doctor recognizes him as a magician… just as the coolie collapses, dead. The Doctor is impressed and recognizes the poison as scorpion venom, and identifies the coolie as a member of the Tong of the Black Scorpion. Chang departs and the Doctor immediately takes command of the investigation, asking for an autopsy.
Jago meets with Casey after the last show and wonders where Chang is. He goes into Chang's dressing room and investigates Mr. Sin, which seems to be inactive although he still has blood on his hands. Casey interrupts him and Jago passes off his suspicions before going down to the basement to investigate.
The Doctor talks about how the Tong of the Black Scorpion worshipped the Chinese god Weng-Chiang. They arrive at the coroner's as another Tong member follows them. The Doctor barges in and meets with the pathologist, Professor Litefoot. The Doctor quickly concludes that the bite marks are those of an animal, a giant rodent. However, the wounds were inflicted after death and the man was killed by a stab wound to the heart, as Leela predicted. The Doctor goes through the man's belongings and notices exceedingly large rat hairs. The Doctor remembers that Weng-Chiang is the god of abundance, and made things grow. The Doctor goes off to investigate and leaves Leela behind with Litefoot. The Tong member comes up behind the Doctor with a hatchet and throws it, narrowly missing him. The man freezes in seeming shock as the Doctor confronts him, then collapses with a janis thorn in his back: Leela followed him with a blowgun.
The Doctor goes to the sewer entrance where the Tong members disappeared with the body. He and Leela go down and find a number of rats. However up ahead a giant rat rounds the corner and approaches them as the other rats flee in terror. The Doctor and Leela retreat as the giant rat approaches them…