In 1957, the cold war is in full swing. Professor Henry "Indiana" Jones, along with his friend Mac, is kidnapped by Soviet agents led by Colonel Dovchenko and Irina Spalko, who demand that he search for a box containing the remains of a non-human being at the Area 51 military site. Indy tries to escape and prevent the Russians from taking the box, but his colleague Mac turns out to be a traitor. Fleeing from the agents, who manage to take the box with the skeleton, Jones narrowly escapes death.
Since the U.S. government suspects Indiana Jones of being a double agent, he is stripped of his professorship. He decides to leave town, but is persuaded to stay by a young man named Mutt Williams, as Professor Oxley, an old friend of Jones, is in trouble. Mutt shows Indy a coded letter from Oxley, sent to him by his mother Marion, who disappeared with Oxley. The letter mentions a crystal skull that Indy and Oxley were interested in when they were students. Indiana Jones and Mutt travel to Nazca, Peru to investigate the clues in the letter.