Based on Johnston McCulley's novel, son of the displaced alcalde returns to Los Angeles and challenges the oppressive alcalde as a masked bandit.
In Madrid cavalry officer Diego de Vega (Tyrone Power) is tired of being challenged and announces he is going to California. There he learns peons are discouraged. Captain Esteban Pasquale (Basil Rathbone) tells Diego his father resigned and takes him to the new alcalde Luis Quintero (J. Edward Bromberg). Diego meets his wife Inez Quintero (Gale Sondergaard) and acts like a fop. Diego's mother (Janet Beecher) and father Alejandro de Vega (Montagu Love) welcome Diego home. Padre Felipe (Eugene Pallette) says they need an angel. Alejandro says he was forced out, but he refuses to rebel. Zorro on a horse tears down a tax poster and makes soldiers put up his threat to Quintero. Zorro robs Quintero and Inez in their coach. At night Zorro tells Quintero to appoint Alejandro and go to Spain. Quintero tells Esteban that Zorro was there. In a church Lolita Quintero (Linda Darnell) prays and talks with a padre but sees his sword. Zorro escapes from the soldiers and jumps off a bridge into a river.
Soldiers and Esteban collect taxes from peons, but Zorro robs them. Without mask, cape, and sword, Diego goes to the mission and has Felipe hide the money for the peons. Diego comes to Quintero to ride with Inez, urging both to go to Spain. Esteban gets Quintero to go to Alejandro so that Diego can marry Lolita. Alejandro opposes, but Diego is interested. Diego dines with Lolita and her family and acts effeminately. Quintero agrees to let Diego marry Lolita. Zorro comes to Lolita but changes to Diego and says he loves her. Quintero sees a soldier with a Z carved on his chest. Esteban demands money from Felipe, who tries to use his sword. Alejandro objects to the marriage, but Lolita comes and says she loves Diego. Quintero finds Diego waiting in his office and says Felipe was arrested. Quintero learns that Zorro was in his wine cellar. Frightened Quintero writes his resignation, but Esteban rips it up. Esteban and Diego duel with swords until Diego kills him. Quintero arrests Diego as Zorro and invites people to see the execution. In jail with Felipe, Diego gets the jailer's gun. When Quintero brings Alejandro, Diego escapes with a sword to open the gate for the peons. They fight the soldiers. Diego tells Quintero to resign; he does and names Alejandro as his successor. Diego tells Inez he will marry Lolita and stay in California.
With dictators oppressing Europe and east Asia, sentiment
is strong for a courageous rebel who challenges corrupt officials
by robbing them to return their ill-gotten gains to the poor.
In this situation even a priest cheers the violence used for this
purpose. Diego symbolizes the USA standing aside from the war,
but by drawing its sword could transform the oppression.