Sherlock Holmes and Dr Watson investigate the legend of a supernatural hound, a beast that may be stalking a young heir on the fog-shrouded moorland that makes up his estate.
When a German saboteur jeeringly predicts to the nation new depredations, via their radio "Voice of Terror", the Intelligence Inner Council summons Sherlock Holmes (Basil Rathbone) to help in the crisis.
The disappearance of a young woman's father and a mysterious note years later after the strange regular annual delivery of valuable pearls to her puts Sherlock Holmes on the case.
Holmes, retired to Sussex, is drawn into a last case when his arch enemy Moriarty arranges with an American gang to kill one John Douglas, a country gentleman with a mysterious past.