In Thebes, Egypt, 1290 BC, high priest Imhotep has a love affair with Anck-su-Namun, the mistress of Pharaoh Seti I. When the Pharaoh discovers the affair, Imhotep and Anck-su-Namun assassinate him. Imhotep flees, while Anck-su-Namun kills herself, intending for Imhotep to resurrect her. Imhotep and his priests steal her corpse and travel to Hamunaptra, the city of the dead, but the resurrection ritual is stopped by Seti’s bodyguards, the Medjai. Imhotep’s priests are all mummified alive, while Imhotep himself is sentenced to suffer the Hom Dai, the worst of Egyptian curses, buried alive with flesh-eating scarab beetles. Imhotep is sealed away in a sarcophagus at the feet of a statue of the Egyptian god Anubis and kept under strict surveillance by the Medjai to prevent Imhotep’s return.
In 1926, Jonathan Carnahan presents his sister Evelyn, a Cairo librarian and aspiring Egyptologist, with an intricate box and map, which leads to Hamunaptra. Jonathan reveals he stole the box from an American adventurer, Rick O’Connell, who discovered the city while in the French Foreign Legion. Rick makes a deal with Evelyn to lead them there if they release him from prison.
Rick leads Evelyn and her party to the city, where the group encounters a band of American treasure hunters guided by Rick’s cowardly colleague Beni Gabor. The expeditions are attacked by the Medjai, led by the warrior Ardeth Bay. Against Ardeth’s advice to leave the city, the two expeditions continue to excavate. Evelyn searches for the famous Book of the Living, a book made of pure gold. Instead of finding the book, she, Rick, and Jonathan stumble upon the statue of Anubis and the remains of Imhotep buried underneath. The team of Americans, meanwhile, discover the black Book of the Dead, accompanied by canopic jars carrying Anck-su-Namun’s preserved organs.
At night, Evelyn takes the Book of the Dead and reads a page aloud, accidentally awakening Imhotep. The expeditions return to Cairo, but Imhotep follows them with the help of Beni. Imhotep returns to full strength by killing the Americans one by one, and brings the ten plagues back to Egypt. Seeking a way to stop Imhotep, Rick, Evelyn and Jonathan meet Ardeth at a museum. Ardeth hypothesizes that Imhotep wants to resurrect Anck-su-Namun again and plans to do so by sacrificing Evelyn. Evelyn believes that if the Book of the Dead brought Imhotep back to life, the Book of the Living can kill him again, and deduces the book’s whereabouts. Imhotep corners the group with an army of slaves. Evelyn agrees to accompany Imhotep if he spares the rest of the group.