Insurance investigator Danny Barrett calls in his high school friend MacGyver to a jewelry store where a robbery has taken place. Danny explains it's the latest in a string of robberies and he knows who is responsible: a cultural attaché from the nation of Kanubia, Amir Sumal. However, Sumal has diplomatic immunity. Danny refuses to bring in the police and plans to collect the reward himself. He's gained access to the embassy's computer system and has the password, but needs MacGyver's expertise to hack the system. He's determined that Sumal has stored the information on the stolen diamond on the computer. As they walk to Danny's car, a van runs over Danny and then drives away. MacGyver runs to his friend, who whispers the password "Blue Ice" before dying.
Later, MacGyver and Pete go to the funeral home for the visitation. As they leave, a woman walks by them. MacGyver talks about how he knew Danny in high school and plans to find the killer. Pete says he should stay way because there's nothing they can do, but MacGyver insists on investigating. Pete tells him that Sumal is hosting an art reception at the consulate but an invitation is required.
At the reception, the woman from the funeral home arrives and pickpockets a guest's invitation. Meanwhile, MacGyver climbs over the fence and then climbs up to Sumal's office using an improvised grappling hook. Inside, the woman disguises herself as a maid and gets up to the restricted second floor. When she picks the lock to Sumal's office, MacGyver hides and then grabs her, but she knocks him down. A security guard comes in and MacGyver starts kissing the woman, claiming they're lovers seeking a place to make out. The woman gets close enough to knock the man out and MacGyver gets back onto the computer. Using the password, he downloads the information via modem. They both escape and the woman steals a car to get away. MacGyver pays the valet and takes the car the woman arrived in. He goes to Danny's office and finds her there. She introduces herself as Nikki Carpenter and MacGyver figures she's another insurance investigator who knew what Danny was investigating. The downloaded information is scrambled and Nikki says she has a decryption key in the car she took. MacGyver goes to get it only to discover that Nikki has called the police and told them he stole the car. They arrest him as she drives away with the information.
MacGyver calls Pete to bail him out of jail and returns to his houseboat. He manages to decode the consulate file and discovers it has a list of diamond grades. Nikki comes in and apologizes for getting him arrested. He figures she's more interested in finding out what he decrypted than apologizing. She explains that Nikki was her brother and didn't identify herself because she figured MacGyver was one of Danny's flaky friends. She explains that she worked in Washington on a Senate subcommittee, but left to come and see Danny. She knew what he was up to and tried to warn him but he ignored her. MacGyver offers an alliance so they can avenge Danny's death and Nikki agrees.
They go to Pete with the list and explain that they believe Sumal is hiding the diamond in the code room at the embassy. Pete warns that the best they can do is get Sumal deported, and they'll to convince his superiors by catching the thief red-handed. They come up with a plan to steal the diamond from the code room, but need Sumal's key. They know he plays squash and figure they can get a duplicate at the locker room of his club.
Nikki goes to the restaurant where Sumal eats and bribes the maitre'd to claim Sumal is sitting at her table. She then asks that he leaves but then invites him to stay. She claims she's with a rich family and she and her brother are selling some of the family diamonds. Sumal manages to invite himself on a lunch date with her. As they leave, a man at a nearby table watches them intently.
Pete and MacGyver have set up a Phoenix front office as the Blaine Diamond Exchange with Pete as the owner and MacGyver as Nikki's brother. Nikki arrives and they go through a scam where Nikki gives Pete the family diamond to sell. He puts it in the vault and shows Sumal that they have two shipments of diamonds ready to go. As they leave, MacGyver notes he plays squash and Sumal suggests they play a match. As they leave the office building, the man from the restaurant watches them.
At the club, MacGyver and Sumal prepare to play squash. MacGyver covertly tells Nikki he was unable to get the key. She's less than thrilled to hear she'll have to go into the men's locker room and get it. She borrows a bar of soap from a man and makes an imprint of the key. MacGyver defeats Sumal and meets her back at the house key where he makes a duplicate. She tells him she's got herself invited to the ambassador's reception that Sumal is hosting. She goes to the party with MacGyver hidden in the trunk of her car. He sneaks into the consulate as a deliveryman and then uses a dumbwaiter to get to the second floor. Meanwhile, Sumal greets Nikki and talks with Ambassador Vulnay, who doesn't see any reason to hold the reception. Sumal shows Nikki the consulate's art collection and she mentions the man that's been following them. While Sumal checks the security cameras and sees the man is outside, Nikki steals one of the paintings.
Using the duplicate key, MacGyver gets into the code room. However, the diamonds are hidden in a safe with a six-key lock. Using pencil shavings, he determines which three keys are used and punches them in combination until he gets the safe open. He then gets the diamonds and leaves. Meanwhile, Sumal's security men arrest the man following Nikki while Nikki goes back to her car. Sumal accompanies her and Nikki is forced to kiss him while MacGyver gets into the trunk. She then breaks off the kiss and makes a quick exit.
Sumal interrogates his prisoner and learns he's Charles Keach, a private investigator. Keach tells him that he was hired to follow Nikki, who is actually a thief. He warns Sumal that Nikki is setting him up and Sumal realizes that he's been tricked. He goes to the consulate gallery and confirms that she stole a painting.
Nikki and MacGyver go to the houseboat and discuss an electrical remote that he's built. Sumal and his henchman arrive and demand the painting. As Nikki turns it over, Sumal finds blueprints for the (fake) Blaine Diamond Exchange. They admit they're going to rob it and he prepares to take the plans, perform the robbery themselves, and dispose of them. MacGyver warns him that they've already gone over the entire security system and know just how to get in, and offers Sumal a partnership.
Sumal agrees and they go to the exchange. Nikki gets in through the basement security post by faking an injury from a mugging. She then shoots the security guard and Sumal and MacGyver take welding equipment up to the exchange office. They go through the vault's antechamber and then burn through the door. MacGyver and Nikki bring in an attaché case and load in the diamonds. Sumal takes the case and turns on one of the acetylene tanks, and then breaks off the valve. He locks the antechamber door and leaves them to suffocate. MacGyver quickly replaces the valve with one from another tank and they make their escape. They go downstairs and make sure the "dead" guard is okay. Keach arrives and he goes to the consulate with MacGyver and Nikki.
At the consulate, Sumal arrives and finds Vulnay and Pete waiting for him. He's surprised to see "Blaine" there and Pete explains who he really is. He explains that Sumal has been using the consulate as a front to steal and store diamonds, but Vulnay is reluctant to check the attaché case. MacGyver, Nikki, and Keach slip over the fence and onto the consulate grounds. Sumal tries to enter the consulate and MacGyver triggers the remote, opening the rigged case. The diamonds spill onto the ground, incriminating Sumal. Vulnay has his men take Sumal to be deported.