There is a crisis on Bayport! Soon the city will be without water! Every night water strangely disappears from the new reservoir near Skull Mountain. Frank and Joe Hardy join forces with a team of skilled engineers to solve the baffling mystery.

When the boys arrive at the foot of the mountain, they are met by a human skull rolling down the slope-a chilling warning from a weird hermit. Violence, too, stalks he mountain, where a gang controlled by a powerful crime syndicate hatched a vicious plot. While trying to uncover the gang's sinister motive, Frank and Joe aid their detective father in his search for a missing scientist.

By a clever experiment, the boys discover a clue to the puzzle of the vanishing water. Suspense mounts when they explore an ancient subterranean river channel, deep inside Skull Mountain. In a thrilling climax the famous young detectives solve their own mystery as well as Mr. Hardy's case.