Charles Sturm (Laughton) is a naval commander whose jealousy and abuse makes life miserable for his wife Diana (Bankhead). His suspicions fall on his own subordinate, Lieutenant Jaeckel (Grant). Although his suspicions are baseless, Sturm has Jaeckel transferred. After Charles falls into another fit of paranoid rage and strikes Diana, she wanders off into the streets during a festival and soon encounters another officer, who turns out to be Jaeckel's replacement, Lieutenant Sempter (Cooper). Learning of their affair, which this time is real, not imagined, Charles plots a terrible revenge.
On the night Commander Sturm's submarine is to sail, Diana goes aboard to warn Sempter of Sturm's dangerous frame of mind. But when Sturm arrives, he immediately orders the sub out to sea before Diana can return to shore. In the busy channel outside the harbor, Sturm deliberately maneuvers into the path of an oncoming ship, which rams and sinks the sub. Several compartments are flooded, but the crews are able to get out in time.
Trapped on the bottom, the survivors gather in the control room; Sempter and Sturm square off, asserting command, while Diana exposes Sturm's madness. Sempter takes control and organizes the crew's escape. In a detailed and substantially accurate technical sequence, Diana and the crew exit through the sub's escape trunk using Momsen lungs, and are rescued at the surface. Refusing to leave the ship, Sturm stays behind and lapses into raving insanity; he opens a watertight door to let in the sea, laughing maniacally as the water rises.
Afterwards, cleared of most charges by a court martial, Sempter encounters Diana again in a shop on the street. Soon it begins to rain, and they depart in a cab together.
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