Indy is later attacked in his room by an assassin, which leads him to find a secret door in Willie's room. In retaliation he brings up Jones' shadier elements as an archaeologist, in particular the Sultan of Madagascar's threat of castration should he ever return. Initially the palace seems normal enough the Maharajah's prime minister Chattar Lal acts insulted by his questions about the village's claims. They then lend the heroes elephants so they can reach the palace. The inhabitants explain that the Thuggee cult of Pankot Palace has taken all of their children and their sacred stone that protects the village. They land in India, where they come to a village with no children. They survive by using a raft as a parachute. It turns out that the plane was owned by Lao Che, and the captains abandon the plane, leaving the passengers to die. Lao Che says goodbye to Indy and tells his pilot to kill all of them. He shuts the door and Lao Che is written across the door. Indy, Willie, and Short Round board the cargo plane, with Indy saying that Lao Che made a good try. The three heroes arrive at an airport with Lao Che and Kao Kan right behind them.

A car chase follows, with Willie dropping Indy's gun in the chaos.

Indy drinks the antidote after grabbing it out of Willie's dress. After several awnings break their fall, they land in a car driven by Short Round, Indy's kid sidekick. The two make their escape when the gong crashes through a window. Indy and Willie just barely avoid the mad man's gunfire by hiding behind a rolling gong which Indy cut with a large sword. Chen is killed, and Lao Che's other son, Kao Kan pulls a machine gun on Indy. Willie finds the antidote and slips it in her dress. A brawl ensues, with Indiana Jones trying to grab the antidote and Willie Scott trying to grab the Peacock's Eye. However, Lao Che's son Chen shoots and kills him. Indy's friend Wu Han, in disguise as a waiter, pulls a gun and threatens to shoot if the antidote is not handed over. Willie asks what it is, and Lao replies that it is the antidote to the poison Indiana just drank.

After Indy sips his drink, Lao starts laughing ominously as he pulls out a vial of blue liquid. Lao introduces Indy to Willie Scott, the club's singer and his ' girlfriend'. Indy is delivering the remains of Emperor Nurhachi to a gangster named Lao Che in a nightclub, Club Obi Wan, in Shanghai, China, in exchange for a large diamond. The film is set a year before the events in Raiders of the Lost Ark.

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