A young Japanese man by the name of Ryota goes in search of his missing brother, who was lost at sea. Desperately in need of a boat in order to go look for him, he decides to compete in a dance endurance challenge, where the prize is a yacht. Unfortunately, he's too late to enter, but does end up meeting two of the losers and convinces them to go with him to snoop around the nearby marina. Once there, the trio manages to sneak aboard a yacht for a better look, but are ambushed and held at gunpoint by the man inside. Much to their relief, he allows them to spend the night on board.

The next morning, they awake to find the boat adrift, as Ryota has set sail in search of his brother, much to the dismay of the other three who are now trapped into joining him as they have no experience sailing themselves. Unfortunately, the trip takes a turn for the worse as they sail right into a massive storm. The yacht is then ripped apart by a giant claw that mysteriously rises out of the sea.

At dawn, the four awake to find that they have washed ashore on a remote island, but quickly discover that they are not alone as the isle is housing the base of the terrorist organization called the Red Bamboo. They come to learn that the group is developing nuclear weapons, while the monster Ebirah, a giant shrimp, circles the island and picks off trespassers. It's also discovered that the organization is kidnapping natives from Infant Island, and enslaving them to help produce a liquid that safeguards them from the monster. During a fleet of commotion, one of the captive natives escapes, a young native girl by the name of Daiyo, who manages to run into the other four and joins them. Introductions are cut short, though, as they are spotted by the Red Bamboo, and forced into a nearby cave to hide from them. Much to the group's surprise, they stumble upon a slumbering King Kong deep in the cove's depths.

The next day, the five sneak into the Red Bamboo base, securing supplies. Unfortunately, the five do not go unspotted. After frantically trying to escape, Ryota ends up getting his foot caught in the rope of a weather balloon, and is carried off into the sky, while another is captured and put to work with the Infant Island natives.

The remaining three return to the cave, and decide that they might as well wake King Kong, assuming that the creature might be able to dispense with the Red Bamboo. After much planning, they come up with an idea involving wire which they recently stole and a sword, that is used as a conductor.

Meanwhile, Ryota's balloon deflates and he lands on Infant Island, where the natives are desperately trying to wake Mothra so she can save their people. On the Isle, Ryota finds his lost brother, and together they travel by boat back to the island. Unfortunately, a storm strikes just as they are arriving, and Ebirah appears to attack the small craft. Luckily, a stray bolt of lighting also strikes the sword in the cave and sends a charge down to King Kong who finally awakes. Kong breaks through the nearby hillside, and does battle with Ebirah, defeating the sea monster and sending it into retreat.

As the night breaks and the sun rises, Ryota and his brother meet up with the remaining three survivors, only to be spotted by the Red Bamboo again. The group is separated in their bid to escape, with Daiyo running into King Kong who quickly takes a liking to the girl and scares off the Red Bamboo soldiers. Kong's affection is interrupted, though, by a Giant Condor that Kong fights off. After defeating the bird, the large ape is again disturbed, this time by a fleet of jets sent by the Red Bamboo. During the commotion, Daiyo manages to escape. Kong, now furious, attacks the Red Bamboo base, ripping it apart as Ebirah appears and attacks the fleeing members of the group, who had been using fake mixture of the liquid. The two giants do battle once more, and Kong again claims victory.

Meanwhile, Mothra arrives and is ready to take away the survivors on a small platform that they have constructed. Kong isn't amused, though, and does battle with Mothra, although he's quickly defeated in the ensuing conflict. The deity then flies over and carries her people off to safety, as Kong watches from the island, unbeknownst that a self destruct sequence was initiated upon the Red Bamboo base's destruction. Luckily, at the last minute, the giant ape decides to follow Mothra, leaving the island just before it detonates.

Originally planned as a joint production between Toho and Rankin-Bass, this concept was first pitched by Shinichi Sekizawa in 1966. Approving his idea, Sekizawa then set about creating a more fleshed out script, which he submitted on July 13th, 1966. Unfortunately, Rankin-Bass was displeased about the direction the project was going, although their quarrel was unrelated with the early treatment but instead the fact that Ishiro Honda would not be on board for the production. Toho insisted, though, on having director Jun Fukuda, a then newcomer to the genre, at the helm of the film. Unable to compromise, Rankin-Bass pulled out of the project, and took with them the King Kong character.

Even with the loss of one of the title characters, though, Toho continued with production on Sekizawa's screenplay. Renaming the film Godzilla, Ebirah, Mothra: The Great South Seas Duel (Japanese title of Ebirah, Horror of the Deep), the firm simply substituted King Kong's role for Godzilla in the final product.

Thankfully, Rankin-Bass and Toho would settle their differences the very next year, and would begin work on King Kong Escapes (1967), which was based on the then recent King Kong cartoon and would feature Honda at the director's helm.