Frank Griffin Jr, the grandson of the original Invisible Man, runs a print shop in Manhattan under the assumed name of Frank Raymond (Jon Hall). One evening, he is confronted in his shop by four armed men who reveal that they are foreign agents working for the Axis powers and they know his true identity. One of the men, Conrad Stauffer (Cedric Hardwicke), is a lieutenant general of the S.S., while a second, Baron Ikito (Peter Lorre), is Japanese. They offer to pay for the invisibility formula and threaten amputation of his fingers if it is not revealed. Griffin manages to escape with the formula. Griffin is reluctant to release the formula to the U.S. government officials, but following the Attack on Pearl Harbor agrees to limited cooperation (the condition being that the formula can only be used on himself). Later, while in-flight to be parachuted behind German lines on a secret mission, he injects himself with the serum, becoming invisible as he is parachuting down, to the shock and confusion of the German troops tracking his descent, and after landing strips off all of his clothing.

 Despite walking into Stauffer's trap, Griffin manages to obtain the list of agents, and start a fire to cover his escape. Griffin takes the list of agents to Arnold Schmidt for transmission to England. Conrad Stauffer tries to hide the loss of the list from the prying Baron Ikito, who has been staying at the local Japanese Embassy. When Stauffer refuses to answer Ikito's questions, the two confess to each other that German and Japanese cooperation is not one of trust. Without revealing their plans to each other, both men start separate hunts for the Invisible Agent.Griffin steals into a German prison to obtain information from Karl Heiser about a planned German attack on New York City. Griffin returns with Heiser to Schmidt, who in the meantime has been arrested and tortured by Stauffer. 

Heiser escapes detection and attempts to save his life and career by phoning in Ikito's activities to Stauffer. Griffin and Sorensen are taken to the Japanese embassy, but manage to escape during the mayhem that ensues when Stauffer's men arrive. For their joint failure to safeguard the list of Axis agents, Ikito kills Stauffer and then performs seppuku, ritual suicide, as Heiser watches from the shadows. Assuming command, Heiser arrives too late to the local air base to stop Griffin and Sorenson from escaping. The couple acquires one of the bombers slated for the New York attack, and destroy other German planes on the ground as they fly to England. Stauffer's loyal men catch up with Karl Heiser and he is shot. Griffin succumbs to his injuries before he can radio ahead. England's air defense shoots down their craft, but not before Sorenson parachutes them to safety. Later, in a hospital, Griffin has recovered and is wearing facial cream so that he can be visible again. Sorenson appears with Griffin's American handler, who vouches for Sorenson that she has been an Allied double-agent all along. Sorenson is left alone with Griffin. Griffin reveals that he is actually visible under the facial cream, and they kiss. Sorenson happily accepts the challenge of discovering how Griffin regained his visibility.