In the West Coast of England in 1765, Jim Hawkins, a young boy who is living alone with his mother in England, is looking after their inn, called the Admiral Benbow, when a strange man by the name of Black Dog comes and orders a glass of rum from him, at the same time asking Jim if he has seen a "Captain William Bones". Jim answers that he has never seen a Billy Bones, and gets Black Dog another glass of rum. However, Black Dog looks into the back of the inn and sees an old sea chest with the initials "W.B." inscribed on the side, and takes off. Once he is gone, a man appears in a doorway at the top of the stairs, asking Jim if it was "a one legged man."
Jim tells Billy Bones that the man who came in had a terrible scar across his face, and Bones recognizes him as Black Dog, and tells Jim to give him rum, though he is instructed not to, so that he can get his strength back and leave. Jim tries to keep Bones away from the rum, but is unable to and tells him he will go fetch the doctor if he does not stop drinking. Bones does not listen and Jim runs out of the inn, but runs straight into Blind Pew and is captured. Pew threatens to break Jim's arm if he does not take him to Bones, so Jim leads him inside. Pew then presents Bones will the infamous black spot, and leaves. Bones reveals that he has until dark to live, so Jim helps him to his old sea chest. Bones then cuts open the inside of the lid to reveal a folded piece of paper, puts it into his shirt and then attempts to leave. But he is too ill to walk even a few steps, so he collapses. Knowing he is going to die, he gives Jim the piece of paper and tells him to go get help from the town. Jim leaves, taking a short cut through the hills while Bones bids him good luck.
The pirates return to the inn and begin to ransack it in search of whatever it is they are after. A carriage comes down the road and they flee, chased by some men on horseback, while the carriage stops at the inn to reveal Squire Trelawney, Doctor Livesey, and Jim. They find Bones, and Livesey pronounces him dead, but from shock, not murder. Jim reveals that Bones gave him something that he said the pirates were after, and when the three take a look, they find that it is the map of Captain John Flint's treasure (estimated to be 700,000 pounds). Trelawney, overly excited, makes plans then and there for a voyage, though Livesey warns him that the men who ransacked the inn would still be after it, and Trelawney swears he will not breathe a word about the treasure. He then states that ten days from that time, they would set sail, with Livesey as ship's doctor and Jim as cabin boy.
The ten days pass, and Jim arrives in Bristol Dock with Doctor Livesey, and the two of them meet up with the Squire. After showing them their ship, the Hispaniola, Trewlaney states that he is troubled by the fact that their captain is having little to no luck selecting a crew. He then introduces them to a man whom he hired as ship's cook, named Long John Silver. The three sit down at Silver's tavern to have a meal, and it is revealed that Silver has only one leg. Jim is at first frightened by this, (Though he doesn't say anything to his companions about Bones' warning) but Silver seems kind and civil, stating that he was once in the navy, and volunteers to bring some of his former shipmates aboard the voyage, since they "know the sea". After the meal, Livesey tells Jim to stay and help Silver clean up, though the boy is reluctant. While in the kitchen, Silver introduces Jim to his pet parrot, Captain Flint, who is an avid swearer and "Lives up to her name". Jim then hears a voice behind him ordering a glass of rum, and he turns around to see Black Dog. He cried out for someone to capture him, sending the buccaneer running, with Jim in pursuit. Silver then orders some of the men in the tavern to chase him down, while he asks Jim about the man and states his worries over "sharks like him" giving his tavern a bad name. Silver then gives Jim a small pistol, just his size, telling him that if he ever sees Black Dog again to, "Repel boarders!", because he says that he knows he can trust Jim with a firearm.
Some unspecified time later, Silver, Jim, and Silver's former crew mates arrive on the Hispaniola to prepare for the voyage. Captain Smollett addresses the new crew with the rules and tells the first mate, Mr. Arrow, to take down all their names. Captain Smollett then goes to his cabin to speak with Livesey and Trelawney, stating how displeased he is with the fact that this whole voyage is a treasure hunt. Trelawney swears that he never breathed a word about the treasure, but Livesey asks the captain if he is worried about a mutiny, to which he answers no. He then toasts the voyage with the two, and when he leaves, Trelawney dubs his conduct, "Downright un-English!"
Once the voyage is well underway, possibly weeks in, one of the crew, George Merry, is found to carrying a concealed weapon. Captain Smollett states that the next offense will bring twelve lashes, with that word going out to the whole crew. Jim feels guilty about hiding the small pistol that Silver gave him, and tells Silver he'll have to turn it in, but Silver says that as long doesn't do any harm with it, and isn't quarrelsome, that he is responsible enough to keep it on his person. Silver then goes over to George and a few others of the crew, who are angry with Mr. Arrow reporting the concealed weapon, and Silver reminds George that Mr. Arrow is a friend and that he will take care of him. Later, Silver talks to Jim about making something for Mr. Arrow that will make his less grumpy, and suggests plum duff, but remarks that he cannot get rum for cooking, so Jim tells him he will get some for him from Trelawney. That night, there is a storm, in which Silver invites Mr. Arrow in to eat the plum duff. Once Silver leaves the room, Arrow, being an avid drinker, drinks down the entire bottle that Silver left behind, while Silver secretly watches. Soon afterward, Mr. Arrow emerges from the galley, clearly drunk, and staggers back above deck into the storm as Silver says once again to George Merry, that he is the one taking care of Mr. Arrow. The next morning, a funeral is held for Mr. Arrow, who had been washed overboard.
Time passes, and Jim is seen talking to Hunter at the helm about when they will sight land. Hunter mentions that when all that's left of the rations is boiled beans and salted pork, and when the last apple has been eaten, that they will sight land. Jim excitedly states that he plans to eat up all the apples, and runs below deck to do so. Once he arrives below deck, he finds he is not able to reach the last few apples at the bottom of the barrel, and climbs inside to grab one, and at that moment, he overhears the crew talking about their plans to mutiny, and learns that Silver is the ringleader. Silver convinces the men to wait until they have the treasure on board the ship to strike, and they agree, though Israel Hands states that it won't be easy for them, and Silver tells them to stave off their desire by biting into an apple savagely, and begins to reach into the barrel Jim is hiding in, but Jim is saved by the cry "Land Ho!" from above deck, and the mutineers run up to see for themselves. Jim then leaves the barrel and runs to the cabin to warn the captain, squire and doctor.
The men discuss what can be done, and find that there are nine of them in total against the mutineers. Smollett suggests that Jim try to stay friends with Silver to spy and see what else he can learn about their plans. Jim is hesitant, but he agrees bravely. The next day, Silver tells Jim about all the excitement he will have exploring the island, though he can tell that Jim is withdrawing from him slightly. Smollett asks the men if any of them have seen the island before, and Silver claims that he was a cook on a trader that restocked for water on the island, and offers to guide the ship through the channel in with a long boat. Jim asks if he can go with Silver, and Smollett allows him, knowing the boy might learn something. While the boat is in the water, George Merry, impatient and wanting to take charge himself, tells one of the mutineers to wait for his signal then attack one of the Squire's men, who is guarding the cabin and the supply of muskets inside. The mutineer attacks, but is shot dead and the rest of the mutineers on board are cornered and sent below deck. Silver gives orders for the men in the two boats with him to run for it, and uses Jim as a hostage to keep Smollett and the others from firing, telling them to give up the map in exchange for Jim's life.
Upon reaching the shore, Silver attempts to make up with an angry Jim, but as soon as he releases him, the boy jumps from the boat and runs off into the jungle. After evading pursuit from three of the mutineers, Jim encounters and befriends Ben Gunn, one of Flint's crew who was marooned on the island five years ago. Jim tells him about the mutiny, and Ben tells him he has a boat they can use to get to the Hispaniola, and leads him off. Meanwhile, on the ship, Livesey and Smollett locate the old stockade using the map, and plan to make their camp there in order to rescue Jim. They leave two men on board to guard the mutineers locked below, then make ready to leave. Ben and Jim, having uncovered the boat from its hiding place, climb to a high rock to see if the coast is clear of the mutineers on the shore, and see Smollett, Trelawney and Livesey coming ashore in the boat to find Jim. The two men guarding the ship are suddenly ambushed and killed by the captured mutineers, who then use the cannons to fire at the boat heading ashore. Jim attempts to call out to Captain Smollett, but Ben stops him, warning that Silver would hear and find them both, then leads Jim off to the old stockade. Silver and his men go back aboard ship to get the muskets from the cabin, and find the rest of their men drinking the rum stores. Silver plans to punish George, but Israel says that George would be better in helping them take the stockade, and Silver allows George's rash actions to slide.
Once at the stockade, Jim and his comrades prepare for the coming battle, when Silver appears outside the wall with a flag of truce. Smollett allows him in, and Silver gives him terms, stating that he will let them all live in exchange for the map. Smollett does not accept, and gives his terms, which promises all the mutineers a fair trial in England. Silver demands a hand standing up, but none is given to him, not even by Jim. Silver struggles to his feet on his owns, stating angrily that, "Them that die will be the lucky ones!" He then leaves the stockade, and the fight begins. Most of the pirates fall and are badly injured, soon forced to retreat by the gallant efforts of Smollett and the others, but Silver (who is unable to partake in the battle because of his one leg) shoots and hits Smollett in the shoulder, wounding him badly before he too, makes a retreat. That night, Livesey gives Jim the map, telling him that if they are captured, to use the map to buy his life with. Smollett then reveals that the pirates may not attack again because of the possibility of them bringing the ship close into shore at flood tide the next morning, allowing them to put the fort within range and kill them all. This dismays everyone, and even though Hunter suggests swimming to the ship to cut the anchor rope and let the ship beach itself, Smollett states they can't spare a good fighting man.
Jim, inspired by the idea, sneaks out with a knife and uses Ben Gunn's boat to make his way out to the ship. Once there, he cuts the anchor rope and climbs aboard. He sees a fight between Israel Hands and another mutineer over rum, and sees Israel stab his companion in the back. Israel then attempts to fire the cannon, as instructed by Silver should a new watch need to be brought aboard. Israel is heavily drunk and tired from the fight, so Jim easily knocks him away from the cannon, but Israel grabs him by the shirt and knocks him over, and the map falls to the floor. Israel, shocked by this, attempts to grab it, but Jim gets it first and climbs into the rigging in attempt to escape Israel, who pursues him to the crow's nest. Jim pulls out the pistol Silver gave him, and threatens Israel with it, and Israel at first seems to surrender, but it is revealed that he is reaching for a knife. He throws the knife at Jim and it sticks in his arm, but Jim fires the pistol reflexively and shoots Israel in the face. Israel falls into the ocean below, and Jim painfully makes his way down from the rigging as the ship beaches itself on the far shore of the inlet. Jim then lowers the Jolly Roger flag that had been flown by the pirates, and raises the English Union Jack. He then makes his way ashore and back to the stockade, his knife wound slowly and painfully becoming infected due to the swampy region he makes his way through.
Finally, he arrives back at the stockade and attempts to wake Livesey to tend to his wound, but it turns out to Long John Silver that he has awoken. Silver cheerfully greets Jim, but Jim faints due to both fright and exhaustion. Silver is clearly worried and alarmed by this, and while searching for more wounds on the boy, discovers the map, and hides it on his person as his comrades awaken and discover that Jim has stumbled into their midst. Though the mutineers (George in particular) want to let Jim die, Silver states they can use Jim to bargain with Livesey and the others for the map. The crew is displeased with this decision, and step outside to vote on what should be done. While they do so, Silver puts his coat over Jim, who has woken from his faint, and Silver explains to him that his friends gave them the slip sometime last night. Silver then hails Livesey by calling out from the top of the fort, and sees that the ship has been taken. Livesey responds, and Silver's crew reveal that they are giving him the black spot. When Silver reads it, he notices that it has been cut from a Bible and berates them for doing something so foolish, then states that the rest of this business will be decided once he finishes the business with the map.
Silver takes Jim out to Livesey, who tends to his wound. Silver tells him that he saved Jim's life and that he saw the ship and knows he's beat, though Livesey did not know the ship had been taken until Silver told him, and realizes what Jim has done for them. Jim, now free from the pain in his wound and able to stand, angrily states that Silver would have killed him if he had gotten the map, but Silver reveals that he found the map on Jim's person, and it is now in his own possession, telling Jim that he cares about him enough to save his life even though he already had it. Silver makes a deal with Livesey for freedom if he guards Jim while he and his men search for the treasure, because he knows his men will kill all three of them if he lets Jim leave with Livesey. Livesey agrees and takes a moment to talk with Jim, thanking him for saving the ship and wishing him luck, then lets him go with Silver and leaves. Silver walks back to his men and shows them the map, who are elated with the results of the negotiation, but Silver resigns as captain. The men insist he keeps his position, and he gives them back the black spot to put back into the Bible they took it from.
The pirates then go hunting for the treasure, and on the way, discover a skeleton of one of their former mates on Flint's ship, Darby McGraw. After using the bones, which were laid out by compass as a pointer, they make their way to the treasure, where they find it has already been dug up and taken. The pirates are angered that the treasure is gone, and Silver tells Jim to "Standby for trouble." George Merry accuses Silver of making a deal with Doctor Livesey, and attempts to shoot him, but Silver fires first and kills George. Silver shoots down the pirates one by one, until Livesey and Trelawney arrive with the others and ambush them, shooting them all down. Jim is reunited with his friends, and Ben Gunn gives back Silver's crutch, which he had thrown at one of the pirates. Ben reveals that he found Flint's gold a long time ago and hid it in his cave, where he takes Jim and Silver to see for themselves. Smollett, almost completely recovered from his wound, and despite Jim's defense of Silver, orders Silver to be taken aboard the ship and put in irons.
Once on the beach with some loaded treasure and new supplies, Jim, Trelawney and two men are ready to take Silver aboard the ship. Silver asks Jim if he would take care of Captain Flint for him, but Jim declines, stating that she would only remind him of Silver too much. They get in the boat and start rowing to the ship, where suddenly, Silver snatches the small pistol from Jim's belt and orders Trelawney and the two men to swim for it or he will shoot. He forces Jim to stay in the boat to man his rudder while he rows, but Jim beaches him on a small sandbar and gets out. Silver raises a pistol and threatens Jim to push him off the bank or he'll shoot, but Jim says he won't takes orders from Silver. Silver threatens once more and takes aim, and Jim braces himself for the shot, but Silver drops the pistol, because he is too fond of Jim to shoot him. Silver attempts to push himself off the bank with an oar, and Jim, finally realizing that Silver isn't truly a villain, rushes over to help push out the boat. Silver thanks him and rows away to freedom just as Livesey and the others arrive to try to catch him, but they are too late, as Silver raises a small sail and is quickly out of their grasp.
Silver turns back to shout back to Jim, bidding him goodbye and wishing him good luck. Livesey curses Silver, and at the same time, wishes him the best of luck, while Jim, who realizes that Silver was his friend all along, raises his hand and waves goodbye to him. The film then closes with Long John Silver sailing off into the horizon with the treasure.
- Bobby Driscoll as Jim Hawkins
- Robert Newton as Long John Silver
- Basil Sydney as Captain Smollett
- Walter Fitzgerald as Squire Trelawney
- Denis O'Dea as Dr. Livesy
- Finlay Currie as Billy Bones
- Geoffrey Keen as Israel Hands
- Geoffrey Wilkinson as Ben Gunn
- John Laurie as Blind Pew
As Treasure Island was in the public domain, director Byron Haskin would make an independently produced sequel, titled Long John Silver in 1954, with Newton reprising his role of Long John Silver. Newton went on to play Silver again in a TV series, The Adventures of Long John Silver (made 1954-55). Both of these projects were shot at Pagewood Studios Sydney, with the television series starting (in Technicolor) before Australia had television.