While he is sailing, Sinbad comes across a golden tablet dropped by a mysterious flying creature, which he decides to use as an ornament on his necklace. That night, Sinbad has a strange dream, where he sees a man dressed in black, repeatedly yelling Sinbad's name. Sinbad also sees a mysterious girl with an eye-tattoo on her right palm. The next day, Sinbad's ship is brought to a coastal town in the country of Marabia by a mysterious force.
Sinbad eventually encounters the Grand Vizier of Marabia (Douglas Wilmer) outside his palace. The Vizer says that the ornament on his necklace is actually the second piece of a puzzle, of which the Vizier himself already has another piece, which makes them both allies against one enemy: Koura, the evil magician who wishes to conquer Marabia. The Vizier explains to Sinbad that there is a legend that the 3 puzzle pieces, when put together, will make a map that will show the owner the way to the Fountain of Destiny, which is hidden somewhere on the lost continent of Lemuria. The fountain itself is magical, and any bearer of the fountain will receive youth, a shield of darkness and a crown of untold riches. Sinbad agrees to help the Vizier find the fountain.
The Vizier also tells Sinbad that Koura, who is also looking for the Fountain of Destiny, locked him in a room, set the room on fire, horribly burning the his face. Now, the Vizier is required to wear a golden mask to hide his deformed features. Then he informs Sinbad that the creature that dropped the gold tablet on Sinbad's ship was one of Koura's minions that was created by using his black magic.
Shortly afterward, Sinbad meets with the girl he saw in his dream, and she tells Sinbad that her name is Margiana (Caroline Munro). She, just like the Vizier, joins Sinbad on his voyage. Once they are at sea, Margiana claims that she is now Sinbad's slave, but Sinbad refuses to own her. Koura, who now has a ship and crew of his own, is following Sinbad's ship, and he uses black magic several times in an attempt to halt Sinbad's progress as he helps the Vizier on the quest to find the Fountain of Destiny.
Sinbad fights the one-eyed Centaur, Kali, and his ship's wooden figurehead on his journey. Once they reach the fountain, Koura gets the youth and the shield which turns him invisible. However, in the matter of luck, Sinbad succeeds in killing the magician. Sinbad then, instead of taking the crown of untold riches for himself, instead gives it to the Grand Vizier, in an act of selflessness. The crown's magic powers causes the Vizer's mask to dissolve, and heals his face. Then Sinbad, the Vizier, and the rest of the crew return to Marabia.

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