Scooby and the gang investigate the happenings of several freighters that are getting raided by the ghost of Redbeard the pirate and his crew.
Fred, Daphne, Velma, Shaggy and Scooby are at the Malt Shop when they read in the newspaper about the ghost pirate of Redbeard that has been ruining the business of C.L. Magnus, who owns several freighters that are getting hijacked. The gang goes to see Mr. Magnus at his apartment, but his butler turns them away. They must sneak in as room service. The gang finally gets to see Mr. Magnus and he explains to Mystery Inc. the history of Redbeard the pirate that about an 300 hundred years ago, Redbeard was an terrorist of the seven seas but Mr. Magnus's ancestors brought him to justice. Now his ghost came back for vengeance. Then, the gang goes out on the marina in a speedboat and try to lure Redbeard to the speedboat, but instead, they ram the ghost pirate ship and clamber aboard, splitting up. Shaggy and Scooby run into Redbeard and flee but they are attacked by a flying sword. Redbeard and his two pirate henchmen capture Shaggy and Scooby, and Velma, Daphne and Fred find tubs of dry ice inside a storeroom. Redbeard spares them the plank and forces Shaggy and Scooby to cook him some stew. Shaggy and Scooby make him stew out of ashes, soap, cobwebs and chains. Redbeard forces them to eat it and they do, but the soap causes them to blow bubbles so they create a bubble screen and flee. Hiding from his two henchmen, Shaggy dons a paper pirate hat and imitates Redbeard, fooling the henchman with his shadow and eerily accurate imitation. Shaggy and Scooby accidentally fall overboard, and Velma, Daphne, and Fred see them through a porthole, but the boat takes off and Shaggy and Scooby follow the ghost ship all the way to a hidden cave where Fred, Daphne, and Velma are chained up. They escape and meet up with Shaggy and Scooby, but find a clue on Shaggy's paper pirate hat. On the hat, is a list of the cargo that was on the freighter that was hijacked and how much the cargo was worth. The gang navigates through the caves and enter a cavern full of the stolen cargo -- and Redbeard and his crew! A chase ensues with the pirates and the ghost sword and eventually, with the help of Shaggy, Scooby and a jackhammer, Redbeard is captured and he is unmasked as C.L. Magnus. He was about to lose his business if he didn't come up with some money. So he raided his own ships and sold the cargo. The ghost sword was operated by wires and the dry ice made the eerie fog.
It's unclear whether Mr. Magnus's henchmen are wearing masks throughout the episode or are displaying their true faces. Apparently, they did not seem intriguing enough, as their unspecified reasoning for being there is trivialized by Daphne, simply remarking, "Hired henchmen I guess".