The Sultan puts jewels in a mechanical donkey while Aladdin, Jasmine, and Abu watch it being controlled. The Sultan and Jasmine are unaware that the donkey is Iago's moneymaking scam, but Aladdin and Abu do. After the two reveal that Iago is controlling the donkey, Sultan kicks the parrot out of the palace, telling him that he can return once he learns some respect.
Then Amin Damoola shows up wearing flying shoes and turns the Sultan into a small gold statue. When Amin flies away with Sultan, Aladdin and Abu hop on Carpet and go after the thief. Amin tries to get rid of the three with a monkey paw, but it doesn't work. Then he uses his Swab of the Seven Samurai and dusts Aladdin, Abu, and Carpet. Aladdin and Abu fall and land at the palace garden. Now it's up to Iago and Carpet to stop Amin.
Iago tries to distract the thief by showing him a diamond, but Amin refuses to be distracted. The thief then runs into a wall and lets go of the Sultan. Iago catches Sultan, but then runs into a wall as well, letting the statue go and Amin catches him. Carpet then catches Amin, who accidentally lets go of Sultan. The statue falls into a lava and Carpet catches him and he and Iago return to the palace with Amin.
The gang wants to know who the thief is working for, but he refuses to tell them. So Razoul puts Amin in a dungeon with crocodiles. A magical portal appears, showing Mozenrath in his throne room with Xerxes. Mozenrath gives Amin two tricks left to retrieve the statued Sultan. Amin uses his Belt of Invisibility to make himself vanish. When Razoul tells Aladdin and Jasmine that he put Amin in the crocodile dungeon, the three, along with Abu, go in there and see that the thief is gone. Amin closes the door and reveals to the four that he escaped.
The magical portal reappears and the four see that Amin is working for Mozenrath. Amin vanishes himself again and goes to get the statued Sultan. Abu opens the cell door and Aladdin, Jasmine, and Razoul go after the thief. After Amin takes the Sultan, Iago takes the belt off and Amin is visible again. When he gets caught by the gang, he uses his last trick, the Stone of Transformation. He turns himself into a griffin (he has forgotten about the griffin's toenail needed to break the spell, to Mozenrath's dismay) and gets out of the palace with the Sultan.
Iago uses Amin's Belt of Invisibility to tickle Amin so that he lets go of the Sultan and the parrot catches him. After Amin's last plan fails, Mozenrath tells him that he's going to have a miserable life.
When the gang is trying to figure out how to turn Sultan back to normal, Iago reveals to them that he got one of the griffin's toenails. Genie (who was too busy visiting Napoleon Bonaparte in the beginning but returned in time for Iago and Carpet to return) scratches Sultan with the nail and Sultan is back to normal. Iago tells him that he saved his life twice and that he has a belt of invisibility for him, which Abu is now using to steal bananas.