Twenty-five years after he first rode to avenge evil, Zorro has begun to slow down. Unwilling to abandon his crusade for justice, he now tries to outwit his foes rather than outfight them. However, when Brother Napa is arrested for selling wine before its time and is unjustly jailed, Zorro again takes up his sword to duel with the pueblo’s evil commandante.

Commandante Pico’s plan to capture Angelica, a suspected gun runner, fails and the rebel reaches the monastery of Brother Napa. Don Carlos, who has been entertaining the children there, rushes to her rescue when Pico follows her and tries to take her back to town. Dressed as Zorro, Carlos takes her to his house, where he promises she’ll be safe.

Commandante Pico tries a new tactic to end Zorro’s influence over the pueblo when he disguises himself in the characteristic black mask and begins robbing the peons. Unaware of this plot, Don Diego is dismayed when the people begin turning against him. When Bernardo discovers the reason, Diego decides to clear his name and avenge this injustice.

When Bernardo tries to wash his costume, a gust of wind blows the clothes into the picnic lunch of Commandante Pico. The soldier arrests Bernardo and takes him to jail, hoping to prove that Don Diego is the masked rider. He sends for Diego and accuses him, but when Diego is forced to wear the costume, it was shrunk and no longer fits him. Pico tortures Bernardo to learn Zorro’s identity and the faithful servant confesses that he is the masked rider in the hope of saving Diego.

Commandante Pico receives unwelcome news that a life-long rival, El Excellente, is due to arrive for an inspection of the pueblo. He is unaware that Zorro will also be unhappy about the visit, for El Excellente is guarded by Capitan Jorge Mendez, who hates the masked rider and has nearly captured him on several occasions. Diego fears that Mendez, a cruel and harsh man known as the “Butcher of Barcelona”, will be named to run the pueblo.